Just days away from a House hearing where Republicans are likely to charge that the 2010 health law鈥檚 cuts to Medicare Advantage plans will cause insurers to leave the program and seniors to pay more for coverage, the Obama administration said Wednesday that as a result of the law seniors now have more of these private plans to choose from and that coverage is less expensive.
Next year, the number of plan choices will increase by 7 percent. In聽addition,聽since the law was enacted in March 2010,聽premiums have dropped by 10 percent, while enrollment in the program has increased 28 percent, according to the聽. The average monthly Medicare Advantage premium in 2013 is projected to rise $1.47 to $32.59.
The House Ways and Means Health Subcommittee will discuss the Medicare Advantage program during a Friday morning hearing.聽 In a , subcommittee chairman Wally Herger, R-Calif., said the health law鈥檚 cuts to Medicare Advantage 鈥渨ill significantly alter the program and jeopardize seniors鈥 access to the health plans they rely on.鈥
More than 13 million Medicare beneficiaries 鈥 just over a quarter of all Medicare enrollees 鈥 are in Medicare Advantage plans, an聽alternative to traditional Medicare offered by insurance companies. The health law will reduce payments to Medicare Advantage plans by $156 billion from 2013 through 2022, according to the . President Barack Obama and many Democrats have backed payment cuts to the plans, citing data that the government has in the past paid about per beneficiary in Medicare Advantage than per beneficiary enrolled in the traditional program. Proponents of the private plans point to their better coordination of care and extra benefits and services they provide, including vision, hearing and dental benefits.
鈥淲e remain concerned that the benefits and coverage Medicare Advantage beneficiaries rely on today could be put at risk鈥 between the law鈥檚 cuts and a new premium tax on health plans that begins in 2014, Karen Ignagni, president and chief executive officer of America鈥檚 Health Insurance Plans, said in a statement. 鈥淕iven the size and scope of these cuts, Medicare beneficiaries are likely to face higher costs and coverage disruptions in the coming years.鈥
The聽CBO and the that as those cuts kick in, fewer seniors will enroll in Medicare Advantage and the level of benefits they offer will be reduced. 聽Jon Blum, acting principal聽deputy administrator at CMS, said such predictions for the聽 program have proven to be false so far and will continue to be. CMS is overseeing the program 鈥渋n a much stronger way,鈥 he said, that includes tougher negotiations to create a more competitive environment between plans and a greater focus on quality.
鈥淲e are operating this program much differently than聽in the past,鈥 he told reporters Wednesday.
Additional payments to Medicare Advantage plans may also be contributing to their willingness to stay in the program.聽 The 聽and the聽 (MedPAC), among others, have questioned whether the $8 billion in Medicare has awarded to health plans as part of the health law has softened the blow of the impending cuts. Expect to hear more about that at Friday鈥檚 hearing.
