Fact Check on the Impact of New Medicare Advantage Cuts on Seniors

Fact Check on the Impact of New Medicare Advantage Cuts on Seniors

“Seniors are going to be shocked when they see the impact recently enacted Medicare Advantage cuts will have on their health care coverage. These are the largest ever cuts to Medicare Advantage and will result in higher premiums and reduced access to vital health care services for seniors in the program,” said AHIP Press Secretary Robert Zirkelbach.

AHIP letter to Secretary Sebelius

Last Friday, AHIP President and CEO Karen Ignagni sent a letter to Secretary Sebelius expressing concern about the impact new cuts to Medicare Advantage will have on seniors in the program. Highlights of the letter include:

  • “The new health care reform law includes $136 billion in direct cuts to Medicare Advantage, along with $70 billion in indirect cuts. This amounts to the largest funding reduction in the history of this program.”
  • “Medicare Advantage beneficiaries are likely to begin to feel the effects of these cuts starting next year.”
  • “History has demonstrated that inadequate Medicare Advantage payments result in higher premiums and reduce benefits and choices for seniors.”

CBO: Millions to Lose Medicare Advantage Coverage, Benefits Cut in Half

The Congressional Budget Office released its projections of the impact proposed cuts to Medicare Advantage would have on the millions of seniors across the country who rely on this program for their health security. Here are a few highlights:

  • 5 million seniors will lose their coverage:

According to CBO, Medicare Advantage enrollment in 2019 will drop from 13.9 to 9.1 million. This is a 35 percent decline in enrollment based on current projections – a loss of 4.8 million seniors.

  • Benefits will be cut in half:

According to CBO, the average value of additional benefits provided by Medicare Advantage plans will decline from $135 in 2019 to $67 – a 50 percent decline.

CMS Actuary: “Less Generous Benefit Packages” and 50 percent of Seniors to Lose Medicare Advantage Coverage

The Centers for Medicare and Medicare Services Chief Actuary Rick Foster released an analysis of the Patient Protection and Affordable Care Act in late April. The analysis showed that the reform law would have the following impact on Medicare Advantage beneficiaries:

  • Benefit reductions:

“The new provisions will…result in less generous benefit packages.”

  • 7.4 Million seniors will lose coverage:

“We estimate that in 2017, when the MA provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law.”

Seniors in Medicare Advantage receive high quality health care services

AHIP released a new publication that provides company specific examples of the types of programs and services that health plans have implemented to reduce preventable hospital admissions, readmissions, and emergency room visits:

  • Expanding patient access to urgent care centers, after-hours care, and nurse help lines give patients safe alternatives to emergency rooms for non-emergency care.
  • Arranging for phone calls and, in some cases, in-home visits by nurses and other professionals to make sure that follow-up appointments are kept, medications are being taken safely, care plans are being followed, medical equipment is delivered, and home health care is being received.
  • Offering intensive case management to help patients at high risk of hospitalization access the medical, behavioral health, and social services they need.
  • Arranging for home visits by multidisciplinary teams of clinicians, who provide comprehensive care, teach patients and their caregivers how to take medications correctly, and link families with needed community resources.
  • Revamping physician payment incentives to promote care coordination and improved health outcomes.

A new analysis of federal and state government data provides further evidence that seniors in Medicare Advantage have lower risk-adjusted hospital readmission rates than patients in Medicare’s traditional fee-for-service (FFS) program. The study analyzed data from nine states and found reductions in risk-adjusted hospital readmission rates averaging 14-29 percent among seniors in Medicare Advantage compared with Medicare FFS enrollees.

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