Medicare Advantage plans are facing a payment cut next year, the federal Medicare agency said Friday.
The administration’s planned cut into Medicare Advantage — privately administered plans that serve about 30 percent of seniors — defies a months-long lobbying campaign from insurers. The industry has marshalled bipartisan support in Congress for their effort to block the payment cut. They argue that the Affordable Care Act — which imposes roughly $150 billion in cuts over 10 years — has already jeopardized the benefits the 16 million seniors in the program receive.
“To suggest that cutting $200 billion from Medicare Advantage can be done without impacting seniors’ benefits is just wrong,” said Robert Zirkelbach, spokesman for the industry association America’s Health Insurance Plans. “Medicare Advantage plans are trying to do everything they can to preserve benefits and mitigate the costs for beneficiaries.”
The cuts imposed by the health care law were aimed at stopping historic overspending in the program, which cost about 14 percent more than traditional Medicare coverage, according to reports. Policymakers approved the cuts in an effort to increase efficiency in providing Medicare coverage through private plans, but insurers say those cuts will be passed down to seniors.
Insurers have the support of a growing coalition in Congress; 40 senators sent a letter to the Centers for Medicare and Medicaid Services, the Health and Human Services agency that oversees the Medicare program, asking for payment rates to be kept level.
AHIP is using its “Seniors Are Watching” campaign to remind the Beltway audience that beneficiaries will see the effects of payment cuts in late October — just before the midterm elections. The lobbying and public-relations blitz will likely last through April, when CMS must finalize next year’s payment rates.
There’s a chance CMS could backpedal. Last year the agency reversed a 2.3 percent cut into a 3.3 percent increase, and AHIP is hoping for at least a flat rate — if not another reversal — this year.
“We continue to believe that in a challenging congressional election year for Democrats that the Obama administration will likely moderate these proposed rate cuts,” wrote Paul Heldman in an analysis of the proposed payments. Heldman is a senior health policy analyst at Potomac Research Group, an independent industry research firm.
But Democrats have been wary of Medicare Advantage since the program began. Many liberals see it as an unnecessary subsidy for insurance companies, while Republicans say it’s a promising way to bring competition into the health care market.
Although Medicare Advantage plans are more expensive than traditional Medicare, they often cover services that traditional Medicare doesn’t — which is part of the reason the program has become so popular.
Enrollment rose in 2014 to 15.9 million enrollees, roughly a 9 percent increase from the year before, according to a new analysis from the consulting firm Avalere Health.
Roughly 30 percent of Medicare beneficiaries are choosing insurance plans through Medicare Advantage, rather than traditional Medicare administered by the federal government.
“MA plans continue to increase enrollment by finding new ways to offer attractive benefits and value to beneficiaries,” Avalere CEO Dan Mendelson said in a press release.
The Congressional Budget Office predicted enrollment would fall after the health law and its Medicare Advantage cuts passed, but data from the Kaiser Family Foundation show a steady increase of about 10 percent annually since 2009 in the program.
What We're Following See More »
The House has passed a one-week spending bill that will avert a government shutdown which was set to begin at midnight. Lawmakers now have an extra week to come to a longer agreement which is expected to fund the government through the end of the fiscal year in September. The legislation now goes to the Senate, where it is expected to pass before President Trump signs it.
Alexander Acosta was confirmed Thursday night as Labor secretary, officially filling out President Trump's cabinet on day 98 of his presidency. Nine Democrats joined every present Republican in voting to approve Acosta, with the final tally at 60-38. Trump's first choice for Labor secretary, Andrew Puzder, withdrew his nomination after taking criticism for hiring undocumented workers and for other matters in his personal life.
"Rep. Will Hurd (R-TX) plans to introduce legislation today designed to help federal agencies update their aging technology—and this time, it has White House backing. Hurd worked alongside White House Office of American Innovation officials Reed Cordish and Chris Liddell in crafting and tweaking the legislation, and called their partnership an 'invaluable' part of the process."
"The State Department plans to cut 2,300 U.S. diplomats and civil servants—about 9 percent of the Americans in its workforce worldwide—as Secretary of State Rex Tillerson presses ahead with his task of slashing the agency’s budget, according to people familiar with the matter. The majority of the job cuts, about 1,700, will come through attrition, while the remaining 600 will be done via buyouts."
"Despite pressure from the White House, House GOP leaders determined Thursday night that they didn’t have the votes to pass a rewrite of the Affordable Care Act and would not seek to put their proposal on the floor on Friday. A late push to act on health care had threatened the bipartisan deal to keep the government open for one week while lawmakers crafted a longer-term spending deal. Now, members are likely to approve the short-term spending bill when it comes to the floor and keep the government open past midnight on Friday."