U.S. Proposes Cuts to Rates in Medicare Payments - The federal health care law squeezed substantial savings out of Medicare, according to the Congressional Budget Office, and the money will help offset the cost of subsidizing coverage for people who were uninsured.

From The New York Times:

Federal payments to managed-care organizations, known as Medicare Advantage plans, are based on a complicated formula that reflects how much it costs to care for Medicare beneficiaries, and those costs have been growing much more slowly than in the past. Experts often focus on the benchmarks used to calculate changes in Medicare payments to private plans. The administration proposed to reduce these benchmarks by 1.9 percent in 2015. Other factors in the formula will deepen the cuts.

Lawmakers from both parties had urged the White House to avoid any cuts, even though the reductions in payment were explicitly authorized by the 2010 health care law.

The announcement late Friday is likely to reverberate on Wall Street and on Capitol Hill, where insurers, employers and beneficiaries plan to lobby against the cuts. That effort was so intense last year that the Obama administration reversed itself, scrapped plans for a cut and increased rates instead.

The federal health care law squeezed substantial savings out of Medicare, according to the Congressional Budget Office, and the money will help offset the cost of subsidizing coverage for people who were uninsured.