Bipartisan Group Of Senators Concerned About Medicare Advantage Cuts

Some Democrats have now joined their Republican counterparts in asking the Obama administration to moderate scheduled Medicare Advantage payment cuts for 2015.

Photo by Karl Eisenhower/KHN

In a letter to Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner,  a bipartisan coalition of 40 senators urged the administration “to maintain payment  levels that will allow [Medicare Advantage] beneficiaries to be protected from disruptive changes in 2015.” Cuts to Medicare Advantage plans are part of the $716 billion in Medicare spending reductions the health law calls for over the next decade.

Senate Democrats who signed the letter include Charles Schumer of New York, a member of the Senate Democratic leadership team, as well as several who are facing tough re-election campaigns, including Kay Hagan of North Carolina, Mark Pryor of Arkansas and Mary Landrieu of Louisiana.

As early as this week, CMS is expected to release preliminary Medicare Advantage payment rates for 2015 that insurers have estimated could reduce payments by as much as 6 percent to 7 percent next year. Insurers and other Medicare Advantage proponents say cuts of that magnitude could cause premium increases and benefit reductions.

“Seniors cannot afford another round of rate cuts to their Medicare Advantage coverage,” said AHIP President and CEO Karen Ignagni in a release. “CMS should protect seniors in the program by maintaining current payment levels next year.” Final Medicare Advantage payment rates for 2015 are scheduled to be released in April.

According to the senators’ letter, about 15 million seniors and individuals with disabilities — accounting for 28 percent of Medicare beneficiaries — are enrolled in Medicare Advantage plans. The policies tend to offer extra benefits, such as hearing aids or gym memberships, that are not available in traditional Medicare.

For years, Medicare Advantage plans were paid more per beneficiary than what Medicare paid for beneficiaries enrolled in traditional fee-for-service. The health law aims to equalize that spending over time, so the government pays the same amount whether a beneficiary enrolls in Medicare Advantage or traditional Medicare.

The Senate letter isn’t the first of its kind from lawmakers. In a Feb. 13 letter to President Barack Obama, House GOP leaders and key Republican committee chairs expressed their concern over the impending Medicare Advantage cuts. The cuts, along with additional CMS regulations, “will force millions of Americans to face higher health care costs or lose access to their doctor, health plan, lifesaving drugs, and the benefits they’ve come to rely on.”

However, federal officials’ choices may be limited. In a blog post, Edwin Park of the Center on Budget and Policy Priorities, a left-leaning think tank, writes that the insurers’ campaign against the payment cuts suggests that the administration will make trims beyond those included in the health law. “In reality, as was the case last year, the [a]dministration likely won’t propose any new payment reductions,” Park wrote. “It will likely just announce how it will apply existing law, reflecting the combined impact on Medicare Advantage payment rates of health reform and the continued slowdown in growth in Medicare Costs.”

This article was produced by Kaiser Health News with support from The SCAN Foundation.