MA plans constitute the part of Medicare through which private health plans provide comprehensive medical and drug coverage to seniors and other Medicare beneficiaries. CMS recently proposed a 2.3 percent reduction in MA payments for 2014 at a time when medical costs are projected to increase by three percent. This is the lowest growth rate in the history of the MA program, and it is far below the 2.8 percent increase in payment rates for 2013.
Karen Ignagni, America's Health Insurance Plans (AHIP) President and CEO, recently stated, "The proposed changes to Medicare Advantage payments are a crushing blow to the millions of seniors and people with disabilities who count on this critically important part of Medicare."
The new proposed payment cuts are in addition to the MA cuts and new health insurance tax included in the Patient Protection and Affordable Care Act (PPACA). AHIP hired actuaries at Oliver Wyman to assess the cumulative impact of all these changes; and Oliver Wyman estimated in its February 2013 report that the combined effect will be a 6.9 to 7.8 percent cut to MA plans in 2014, causing benefit reductions and premium increases of $50 to $90 per member per month.
Nearly 100 Members of the U.S. House of Representatives have urged CMS to reconsider the payment cuts. In a letter to CMS earlier this month, lawmakers wrote that the payment cuts "will leave many vulnerable seniors with fewer benefits, higher out-of-pocket costs, and in some cases the loss of their current MA coverage."
Just the other day, I received the following communication from Congressman C.W. Bill Young, U.S. Representative for Florida's 13th district:
March 22, 2013
Because of your earlier support for
private Medicare Advantage (MA) plans, I thought you might be interested
to learn of recent events in this regard.
As a Representative of one of the largest number
of Medicare beneficiaries in the Congress, you can be sure that I am greatly
opposed to any reduction in service for our nation's seniors,
particularly those with multiple chronic conditions as MA plans have a proven
track record when it comes to coordinating care for chronically ill
individuals.
That is why I agreed to sign a letter
along with more than 90 of my House colleagues that was sent March
15th to Centers for Medicare and Medicaid Services (CMS) Acting
Administrator Marilyn Tavenner expressing serious concerns with
the calculations that brought forth a February proposal by
CMS to reduce MA payments by 2.3 percent for next year. Combined
with the huge reductions in MA payments that are planned over the next several
years to help pay for the controversial 2010 Patient Protection and
Affordable Care Act, this additional cut could very well lead to
significant disruption for the 14 million beneficiaries enrolled in MA
plans. Specifically, it is estimated the cumulative impact of these
changes will reduce MA payments by more than 8 percent in 2014.
This is a clear example of our efforts to
prevent any further reduction in MA plans from taking place. Of
course, the solvency of the Medicare program is an issue
that will remain under careful scrutiny by the Congress and you can be sure
that I will continue to closely monitor the situation and will follow up with
you on any new developments that occur.
As always, I greatly
appreciate knowing of your support for my efforts on this important matter of
mutual concern. With best wishes and warmest personal regards,
I am Bill Young
Member of Congress
Andrew again. This time, I'm 100% in agreement with Congressman Young! Of course, that's not always been the case during the 15 years I've resided in Pinellas County.
Until next time,
Andrew Herman
AH Insurance Services, Inc.
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