New Proposed Payment Cuts Would Harm Beneficiaries
Washington, D.C. – Nine out of ten seniors are satisfied with their Medicare Advantage coverage, according to a new survey from North Star Opinion Research commissioned by America’s Health Insurance Plans (AHIP). Despite seniors’ overwhelming satisfaction with the program, the Centers for Medicare & Medicaid Services (CMS) recently proposed new cuts to Medicare Advantage that exacerbate the impact of the cuts and taxes included in the health care reform law. These cuts will lead to higher costs, fewer benefits, and limited health care choices for beneficiaries.
Medicare Advantage is the part of Medicare through which private health plans provide comprehensive medical coverage to seniors and other Medicare beneficiaries. More than 14 million Americans, or roughly 28 percent of all Medicare beneficiaries, are enrolled in a Medicare Advantage plan because of the better services, higher-quality care, and additional benefits these plans provide. Research clearly demonstrates that these plans are more effective than the fee-for-service part of Medicare at addressing crucial patient care issues, including reducing preventable hospital readmissions, increasing primary care visits, and managing chronic illnesses.
CMS recently proposed a 2.3 percent reduction in Medicare Advantage payments for 2014, at a time when medical costs are projected to increase by three percent. The new proposed payment cuts are in addition to the billions of dollars in Medicare Advantage cuts and a new health insurance tax included in the Affordable Care Act. A new report from Oliver Wyman estimates that the cumulative impact of these cuts and taxes will result in an estimated 6.9 to 7.8 percent cut to Medicare Advantage plans in 2014, leading to benefit reductions and premium increases of $50 to $90 per month for a typical Medicare Advantage beneficiary.
“These steep cuts to Medicare Advantage will result in seniors losing the benefits they like and rely on today,” said Karen Ignagni, President and CEO of AHIP.
The new survey from North Star Opinion Research found that nine out of 10 seniors are satisfied with their Medicare Advantage plan. These findings are consistent with a 2007 satisfaction survey of Medicare Advantage beneficiaries. Other key findings from the survey include:
- Seniors in Medicare Advantage are as satisfied with their plan as seniors in traditional Medicare. Medicare Advantage enrollees say they are satisfied with their plan by a 90 to 7 percent margin, similar to the 92 to 5 percent satisfaction of those in traditional Medicare.
- Seniors’ satisfaction with specific aspects of their Medicare Advantage coverage remains high:
- Ninety-four (94) percent are satisfied with the quality of care they receive.
- Ninety-two (92) percent are satisfied with their choice of doctors.
- Ninety (90) percent are satisfied with the benefits their plan provides.
- Eighty-nine (89) percent are satisfied with their coverage for preventive care.
- Eighty-two (82) percent are satisfied with their coverage for prescription drugs.
- Eighty-one (81) percent are satisfied with their out-of-pocket costs.
AHIP also recently released a report which found that low-income and minority Medicare beneficiaries continue to rely on the high-quality health care coverage provided by Medicare Advantage plans. According to that report, 41 percent of Medicare beneficiaries with Medicare Advantage coverage had incomes of $20,000 or less. By comparison, 37 percent of all Medicare beneficiaries had incomes of $20,000 or less. In addition, 31 percent of African-American Medicare beneficiaries and 38 percent of Hispanic beneficiaries were enrolled in Medicare Advantage plans.