Study: Cuts to Medicare Advantage Top $1,500 Per Senior

Analysis says Obamacare cuts will affect all beneficiaries.

BALTIMORE - APRIL 5: Nurse Coordinator Lisa Chrisley (R) injects an experimental flu vaccine into the arm of volunteer Kwisa Kang of Mt. Washington, Maryland, a medical school researcher, during a clinical trial to test the effectiveness of the vaccine to combat avian influenza April 5, 2005 at University of Maryland School of Medicine in Baltimore, Maryland. The trial aims to find out if the vaccine can protect people from a lethal avian flu strain, also known as H5N1, which was first detected in chickens and other birds in Hong Kong in 1997, claiming the life of a three-year old boy. There have been at least 69 more confirmed cases with 46 deaths since then, mostly in Vietnam and Thailand. University of Maryland School of Medicine was one of three U.S. sites that took part in the trial funded by the National Institutes of Health. (Photo by Alex Wong/Getty Images)
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Sam Baker
April 17, 2014, 1 a.m.

Obama­care’s Medi­care Ad­vant­age cuts will lead to be­ne­fit re­duc­tions of about $1,500 per be­ne­fi­ciary, ac­cord­ing to a new ana­lys­is from a con­ser­vat­ive think tank.

The Amer­ic­an Ac­tion For­um, foun­ded by former Con­gres­sion­al Budget Of­fice Dir­ect­or Douglas Holtz-Eakin, said al­most all Medi­care Ad­vant­age be­ne­fi­ciar­ies will feel the ef­fect of cuts to the pro­gram.

The fed­er­al Medi­care agency re­cently backed off a pro­pos­al to make ad­di­tion­al cuts to Medi­care Ad­vant­age — the second year in a row it has pro­posed and then aban­doned such re­duc­tions. But the AAF ana­lys­is says the re­duc­tions man­dated in the Af­ford­able Care Act will still af­fect be­ne­fits for most seni­ors who use the pro­gram.

Roughly 30 per­cent of Medi­care be­ne­fi­ciar­ies — about 16 mil­lion seni­ors — use the privately ad­min­istered Medi­care Ad­vant­age plans. The pro­gram con­tin­ues to grow, des­pite the Af­ford­able Care Act’s cuts. En­roll­ment rose in 2014 to 15.9 mil­lion — roughly a 9 per­cent in­crease from the year be­fore, ac­cord­ing to a re­cent ana­lys­is from the con­sult­ing firm Avalere Health.

Ac­cord­ing to AAF, though, seni­ors who use Medi­care Ad­vant­age are fa­cing an av­er­age be­ne­fit loss of about $1,500 per year com­pared with pre-Obama­care rates. From 2014 to 2015, the av­er­age cut is about $300, or 3 per­cent.

The ef­fects vary by state. Some, such as Alaska, will see slight in­creases in pay­ments to Medi­care Ad­vant­age plans, while oth­ers, in­clud­ing Louisi­ana, will face high­er-than-av­er­age re­duc­tions.

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