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Report: Seniors to Lose Benefits and Choices as a
Result of CMS' Proposed Cuts to Medicare Advantage
 
What is Medicare Advantage and Who is Covered?
 
The Affordable Care Act's Impact
 

Report: Seniors to Lose Benefits and Choices as a Result of CMS' Proposed Cuts to Medicare Advantage 

On February 21, CMS, released the 2015 advance notice, which include proposed changes to Medicare Advantage payments for next year.  According to a new report from Oliver Wyman, these changes, if finalized, would result in a 5.9 percent cut to Medicare Advantage payments in 2015.  This would result in seniors facing benefit reductions and premium increases of $35-$75 per month, or $420-$900 for the year, according to the report.

If the new changes proposed by CMS are implemented, the program would be hit by a double-digit cut over just a two-year period, causing cost increases and benefit reductions for seniors of $65-$145 per month, or as much as $1,740 over two years, according to the Oliver Wyman analysis. 

Cuts of this magnitude could result in a “high degree of disruption in the MA market,” including the “potential for plan exits, reductions in service areas, reduced benefits, provider network changes, and MA plan disenrollment,” the report stated.

Seniors across the country would feel the impact of these cuts. An updated analysis by Oliver Wyman examines the state-by-state impact of these cuts.

State-Specific Infographics 

MA Infographics 

 

The Affordable Care Act already includes more than $200 billion in payment cuts, the vast majority of which have not gone into effect yet, and imposes a new health insurance tax that begins this year. These were real cuts in payments – not reductions in rates of projected growth. 

Seniors will see the impact of any new payment cuts in late October 2014, when they begin enrolling in their 2015 Medicare Advantage coverage.  Another round of payment cuts would mean seniors learning that out-of-pocket costs are higher, benefits have been cut, provider access is restricted, and choice of plans is more limited. 

Infographic_3 MythFact 

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What Is Medicare Advantage and Who Is Covered?

Medicare Advantage is the part of Medicare through which private health plans provide comprehensive medical coverage to seniors and other Medicare beneficiaries.

Over 15 million Americans, or roughly 29 percent of all Medicare beneficiaries, have chosen to enroll in a Medicare Advantage plan because of the better services, higher-quality care and additional benefits these plans provide.  Analysis of federal data also shows that Medicare Advantage is an important option for low-income and minority Medicare beneficiaries.  Seniors who chose to enroll in Medicare Advantage express high satisfaction with their coverage and benefits.

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The Medicare Advantage program has received strong  bipartisan support from Congress.Medicare Advantage plans offer a different approach to health care delivery than beneficiaries experience under fee-for-service Medicare. Instead of just focusing on treating beneficiaries when they are sick, these plans place a strong emphasis on preventive health care services that help keep beneficiaries healthy, detect diseases at an early stage, and avoid preventable illnesses. Research has shown that beneficiaries in Medicare Advantage receive higher quality care, are subject to fewer preventable hospital re-admissions and are less likely to have potentially avoidable hospital admissions.

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The Affordable Care Act’s Impact 

The Affordable Care Act reduces funding by more than $200 billion for the Medicare Advantage program ($136 billion directly and another $70 billion indirectly).  Only 4% of the health care reform law’s cuts have gone into effect.  In addition to the funding cuts, the health care reform law also includes a new health insurance tax that will impact seniors and other beneficiaries who have chosen a Medicare Advantage plan.

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The Congressional Budget Office projects that the reform law's payment cuts alone will result in three million fewer people enrolled in Medicare Advantage. A recent study estimated that the health insurance tax will result in seniors facing $220 in higher out-of-pocket costs and reduced benefits next year and $3,500 in additional costs over the next ten years.

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Latest Resources

AHIP Statement on The Future of the Medicare Advantage Program - [PDF]

A statement from America’s Health Insurance Plans’ (AHIP)  on the Future of the Medicare Advantage Program. The statement was submitted  to the House Ways and Means Committee Subcommittee on Health. 

 
Strategic Communications | 07/24/2014

AHIP Statement on Medicare Advantage Payment Rates

While we are still reviewing the final rate notice released by CMS today, below is a statement from America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni on 2015 Medicare Advantage payment rates:

Press Releases | Strategic Communications | 04/07/2014

New State-by-State Data Show Impact on Seniors of Proposed Cuts to Medicare Advantage

Seniors across the country will experience increased costs, reduced benefits, and fewer coverage options if new proposed cuts to Medicare Advantage payments take effect on April 7, according to new state-by-state data from Oliver Wyman.

Press Releases | Strategic Communications | 03/11/2014

New TV Ad Highlights Impact of Proposed Cuts to Medicare Advantage

America’s Health Insurance Plans’ Coalition for Medicare Choices (CMC) today released a new television ad highlighting the impact that recently proposed cuts to Medicare Advantage would have on the millions of seniors enrolled in Medicare Advantage. The new TV ad is the latest part of the Coalition’s ongoing advocacy campaign urging the Medicare agency to protect seniors in the program by maintaining current Medicare Advantage payment rates in 2015.

Press Releases | Strategic Communications | 03/04/2014

Medicare Advantage Rate Cuts: Higher Costs, Reduced Benefits - [PDF]

Seniors enrolled in Medicare Advantage would face premium increases and benefit reductions of $35-$75 per month, or $420-$900 next year, if new Medicare Advantage payment cuts recently proposed by CMS, the Medicare agency, take effect next year, according to a new report by Oliver Wyman. Combined with last year’s 6 percent cut and the program could be hit by a double-digit cut over just a two-year period, causing cost increases and benefit reductions for seniors of $65-$145 per month, or as much as $1,740 over two years. Cuts of this magnitude could cause plan exits, reductions in service areas, reduced benefits, and provider network changes, according to the report.

Infographics | Strategic Communications | 02/27/2014

New Report: Seniors to Lose Benefits and Choices as a Result of CMS’ Proposed Cuts to Medicare Advantage

Seniors and people with disabilities enrolled in Medicare Advantage plans would face premium increases and benefit reductions of $35-$75 per month, or $420-$900 next year, if new Medicare Advantage payment cuts recently proposed by the Centers for Medicare and Medicaid Services (CMS) take effect next year, according to a new analysis by Oliver Wyman prepared for America’s Health Insurance Plans.

Press Releases | Strategic Communications | 02/27/2014

2015 Advance Notice

The Centers for Medicare & Medicaid Services (CMS) released the Advance Notice of Methodological Changes for Calendar Year 2015 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the 2015 Advance Notice) on February 21, 2014. This notice outlines the planned changes to Medicare Advantage (MA) capitation rates applied under Part C for CY 2015 and other regulatory changes that will affect plan reimbursement. Based on information released in the 2015 Advance notice and reductions already being implemented by the Affordable Care Act (ACA), Medicare Advantage Organizations (MAOs) could experience substantial payment reductions for 2015. Such reductions would have a significant impact on the sustainability of MAO program participation and the ability of MAOs to provide stable benefits and beneficiary premiums to their members.

Reports/Research/White Papers | Strategic Communications | 02/25/2014

AHIP Statement on New Proposed Cuts to Medicare Advantage

CMS, the Medicare agency, today proposed additional cuts to 2015 Medicare Advantage payment rates on top of the six percent cut the program faced last year.  

Press Releases | Strategic Communications | 02/21/2014

40 Senators Sign Bipartisan Letter Urging CMS to Maintain Current Medicare Advantage Payment Levels in 2015

A bipartisan group of 40 senators recently sent a letter to the Centers for Medicare and Medicaid Services (CMS) urging the Medicare agency to protect seniors by maintaining current payment levels in 2015.

Press Releases | Strategic Communications | 02/18/2014

Early Indications of Changes to the 2015 Medicare Advantage Payment Methodology and the Potential Effect on Medicare Advantage Organizations and Beneficiaries - [PDF]

The Centers for Medicare and Medicaid Services (CMS) will release the Advance Notice of Methodological Changes for Calendar Year 2015 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the 2015 Advance Notice) on February 21, 2014. This notice is expected to outline the planned changes to Medicare Advantage (MA) capitation rates applied under Part C for CY 2015 and other regulatory changes that will affect plan reimbursement.

Reports/Research/White Papers | Product Policy | 02/06/2014

Seniors Could Face $420-$900 in Higher Costs, Reduced Benefits Next Year Due to New Medicare Advantage Rate Cuts

Seniors and people with disabilities enrolled in Medicare Advantage plans could face premium increases and benefit reductions of $35-$75 per month, or $420-$900 next year, if Medicare Advantage (MA) payments are once again reduced by six percent in 2015, according to a new analysis by Oliver Wyman prepared for America’s Health Insurance Plans.

Press Releases | Strategic Communications | 02/06/2014

Seniors' Coalition Launches Major New Ad and Grassroots Campaign to Protect Medicare Advantage Coverage

As CMS prepares to set 2015 Medicare Advantage payment rates, AHIP's Coalition for Medicare Choices (CMC) is launching its largest-ever mobilization to remind Washington that seniors are following this issue closely and to urge the Medicare agency to protect them from further harm by maintaining current payment levels.

Press Releases | Strategic Communications | 01/14/2014

Medicare Advantage: What You Need to Know - [PDF]

 

Fact Sheets/Issue Briefs/Talking Points | Strategic Communications | 12/16/2013

AHIP Letter to CMS: Seniors Feeling Impact of ACA’s Medicare Advantage Cuts

Given increased attention on provider networks in Medicare Advantage plans, America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni sent a letter to CMS raising concerns about the impact the ACA’s Medicare Advantage payment cuts are having on seniors and highlighting what health plans are doing to preserve benefits and improve value for beneficiaries in the program.

Press Releases | Strategic Communications | 11/20/2013

Health Literacy and America’s Health Insurance Plans: Laying the Foundation and Beyond - [PDF]

This publication explains the innovative approaches that 30 health plans have taken to providing easily understood, actionable health and benefits information for consumers.

Reports/Research/White Papers | Center for Policy and Research, Strategic Communications | 11/15/2013

Coalition for Medicare Choices Launches New “Seniors Are Watching” Ad Campaign to Protect Medicare Advantage from Further Cuts

As Washington debates the budget this fall, including potential changes to Medicare, America’s Health Insurance Plans’ (AHIP) Coalition for Medicare Choices is launching a new ad campaign urging Congress to protect Medicare Advantage from additional cuts.

Press Releases | Strategic Communications | 11/04/2013

250,000 Seniors Sign Up to Protect Medicare Advantage

Over the past few months, 250,000 seniors from all across the country have joined America’s Health Insurance Plans’ (AHIP) Coalition for Medicare Choices (CMC) to support Medicare Advantage and oppose any new cuts to the program.

Press Releases | Strategic Communications | 10/31/2013

AHIP Statement on Medicare Advantage

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni released the following statement in response to today's announcement by the Department of Health and Human Services on enrollment and premiums in Medicare Advantage next year:

Press Releases | Strategic Communications | 09/19/2013

AHIP Statement on Final 2014 Medicare Advantage Payment Rates

America's Health Insurance Plans (AHIP) President and CEO Karen Ignagni released the following statement in response to the final Medicare Advantage payment rates released by the Centers for Medicare & Medicaid Services (CMS) today.

Press Releases | Strategic Communications | 04/01/2013

More than 40,000 Seniors Have Contacted Congress to Oppose CMS’ Proposed Cut to Medicare Advantage

Tens of thousands of seniors all across the country have spoken out against a deep new cut to Medicare Advantage recently proposed by the Centers for Medicare & Medicaid Services (CMS), the agency that oversees the Medicare program. Seniors are calling, writing, and meeting with congressional offices urging their representatives to contact CMS to oppose this cut before it is finalized on April 1.

Press Releases | Strategic Communications | 03/25/2013

New State-by-State Data on Impact of CMS’ Proposed Cut to Medicare Advantage

Seniors all across the country will experience higher premiums and reduced health care benefits if a new cut to the Medicare Advantage program takes effect next year as was recently proposed by the Centers for Medicare & Medicaid Services (CMS), the agency that oversees the Medicare program

Press Releases | Strategic Communications | 03/21/2013

Seniors Speak Out Against Medicare Advantage Cuts in AHIP’s New TV Ad

America’s Health Insurance Plans’ (AHIP) Coalition for Medicare Choices, which represents over 1.3 million Medicare Advantage beneficiaries, is launching a new TV ad as part of its campaign against new cuts to Medicare Advantage recently proposed by the Centers for Medicare & Medicaid Services (CMS).

Press Releases | Strategic Communications | 03/18/2013

AHIP Launches TV Ad Campaign to Stop New Medicare Advantage Cuts

America’s Health Insurance Plans’ (AHIP) Coalition for Medicare Choices, which represents over 1.3 million Medicare Advantage beneficiaries, is launching a TV and online ad campaign to urge lawmakers to speak out against new cuts to Medicare Advantage recently proposed by the Centers for Medicare & Medicaid Services (CMS).

Press Releases | Strategic Communications | 03/06/2013

AHIP Comment Letter Submitted to CMS Regarding 45 Day Notice for 2014 MA Payments - [PDF]

March 1, 2013 Jonathan Blum, Director, Center for Medicare Paul Spitalnic, A.S.A., M.A.A.A., Director, Parts C & D Actuarial Group Centers for Medicare & Medicaid Services 7500 Security Boulevard Baltimore, Maryland 21244 RE: Advance Notice of Methodological Changes for Calendar Year (CY) 2014 for Medicare Advantage (M

Regulatory Comments | 03/03/2013

Medicare Advantage Cuts: Higher Costs and Reduced Benefits Infographic

AHIP has developed an infographic showing the impact of proposed cuts to Medicare Advantage on Medicare Advantage beneficiaries.

Infographics | Strategic Communications | 02/28/2013

Survey: Nine out of Ten Seniors Satisfied with their Medicare Advantage Coverage

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).

Press Releases | Strategic Communications | 02/28/2013

Medicare Advantage by the Numbers State Infographics

AHIP has released infographics outlining the impact of proposed cuts on Medicare Advantage beneficiaries in select states.

Infographics | Strategic Communications | 02/27/2013

New Report: CMS’ Proposed Medicare Advantage Cuts Will Result in Higher Costs, Fewer Benefits for Seniors

Seniors and people with disabilities enrolled in Medicare Advantage plans will face higher premiums, reduced benefits, and loss of coverage options if new Medicare Advantage cuts proposed by the Centers for Medicare & Medicaid Services (CMS) take effect next year, according to a new analysis by Oliver Wyman prepared for America’s Health Insurance Plans.

Press Releases | Strategic Communications | 02/26/2013

Proposed Changes to 2014 Medicare Advantage Payment Methodology and the Effect on Medicare Advantage Organizations and Beneficiaries - [PDF]

On February 15, 2013, CMS released its Advance Notice of Methodological Changes for Calendar Year 2014 Medicare Advantage (“MA”) Capitation Rates and Part C and Part D Payment Policies.

Reports/Research/White Papers | Strategic Communications | 02/26/2013

Low-Income and Minority Medicare Beneficiaries Rely on Medicare Advantage for their Health Security

Low-income and minority Medicare beneficiaries continue to rely on the high-quality health care coverage provided by Medicare Advantage plans, according to a new report released by America’s Health Insurance Plans (AHIP).

Press Releases | Strategic Communications | 02/21/2013

Low-Income & Minority Beneficiaries in Medicare Advantage Plans - [PDF]

New data from the Medicare Current Beneficiary Survey (MCBS) show that Medicare Advantage plans, Medicare’s private comprehensive health plans, continue to be a vital source of coverage for low-income and minority beneficiaries in 2011.
 

Center for Policy and Research | 02/20/2013

Proposed Medicare Advantage Payment Changes Will Hurt Seniors

America's Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement today in response to proposed Medicare Advantage payment changes, the 45-day notice, released by CMS last Friday.

Press Releases | Strategic Communications | 02/19/2013

Studies on Hospital Readmissions, Featuring Health Plan Innovations and Comparisons of Medicare Advantage (MA) and Medicare’s Traditional FFS Program

Studies on Hospital Readmissions, Featuring Health Plan Innovations and Comparisons of Medicare Advantage (MA) and Medicare’s Traditional FFS Program.

Reports/Research/White Papers | Center for Policy and Research | 10/03/2012

The Coalition for Medicare Choices: Working Together to Save Medicare Advantage

The Coalition for Medicare Choices is a rapidly growing organization of Medicare Advantage beneficiaries. More than 1.4 million Americans in 50 states have joined the Coalition to protect the benefits they receive through their Medicare Advantage plan. Together, we are working to show Congress that Medicare Advantage plans provide critical benefits and lower out-of-pocket costs to millions of beneficiaries. As Congress debates potential changes to Medicare Advantage, we will make certain that your voices are heard. The Coalition for Medicare Choices is administered by America's Health Insurance Plans, the national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans.

Advocacy and Coalition Websites | 10/02/2012

AHIP Statement on Medicare Advantage

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni released the following statement on the announcement today by the Department of Health and Human Services that enrollment in Medicare Advantage is projected to increase by 11 percent in the next year and premiums will remain steady.

Press Releases | Strategic Communications | 09/19/2012

Low-Income & Minority Beneficiaries in Medicare Advantage Plans, 2010 - [PDF]

New data from the Medicare Current Beneficiary Survey (MCBS) show that Medicare Advantage plans, Medicare’s private comprehensive health plans, continue to be a vital source of coverage for low-income and minority beneficiaries in 2010.

Reports/Research/White Papers | Center for Policy and Research | 05/03/2012

Hospital Readmission Rates in Medicare Advantage Plans - [PDF]

Based on a large sample of administrative claims data, this study measured 30-day readmission rate for hospitalized Medicare Advantage (MA) patients of 14.5% (per admission) in the 2006-2008 period.  After adjustments for readmission risk and disability entitlement status, the MA readmission rate was about 13% to 20% lower than that in Medicare’s traditional fee-for-service (FFS) program.  Benchmark measurements of readmission rates among MA patients can help provide an impetus for additional reductions in both MA and FFS Medicare.

Reports/Research/White Papers | Center for Policy and Research | 02/28/2012

New Study in AJMC Provides Further Evidence of the Effectiveness of MA Plans in Addressing One of the Most Pressing Problems in Health Care Today

As the nation continues to focus on the crucial patient safety implications of avoiding preventable hospital readmissions, a new study contributes fresh evidence to the mounting body of work indicating that hospital readmission rates are lower in Medicare Advantage (MA) than in Medicare fee-for-service (FFS). 

Press Releases | Strategic Communications | 02/28/2012

Low-Income & Minority Beneficiaries in Medicare Advantage Plans, 2008 - [PDF]

New data from the Medicare Current Beneficiary Survey (MCBS) show that Medicare Advantage plans, Medicare’s private comprehensive health plans, were a vital source of coverage for low-income and minority beneficiaries in 2008.

Reports/Research/White Papers | Center for Policy and Research | 12/06/2010

AHIP Statement on Medicare Advantage

Press Releases | Strategic Communications | 09/21/2010

Reductions in Medicare Advantage Payments: The Impact on Seniors by Region - [PDF]

Heritage Foundation backgrounder on the impact of new Medicare Advantage cuts included in the ACA, which states that these cuts “will restrict senior citizens and the disabled to fewer and worse health care choices, reducing their access to quality health care.”

Reports/Research/White Papers | 09/14/2010

Medicare Advantage is Reducing Preventable Hospital Readmissions for Seniors

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, according to a report released today by America’s Health Insurance Plans (AHIP).

Press Releases | Strategic Communications | 06/07/2010

Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as Amended - [PDF]

The Centers for Medicare and Medicare Services Chief Actuary Rick Foster released an analysis of the Patient Protection and Affordable Care Act, which concluded that cuts to Medicare Advantage would “result in less generous benefit packages” and that MA enrollment would be 50 percent lower than previous projections.

Federal Statutory/Regulatory/ Guidance Docs | 04/22/2010

Comparison of Projected Enrollment in Medicare Advantage Plans - [PDF]

The Congressional Budget Office released its latest projections on the impact new cuts to Medicare Advantage will have on the millions of seniors enrolled in the program. CBO is projecting MA enrollment will decline from 11.7 million enrollees in 2011 to 7.5 million in 2018.

Reports/Research/White Papers | 03/19/2010

AHIP Statement on Health Care Reform Legislation

 

Press Releases | Strategic Communications | 03/18/2010

Previous Medicare Advantage cuts caused seniors to lose their coverage

Following the Medicare Advantage cuts in the Balanced Budget Act of 1997, millions of seniors across the country saw higher premiums, a reduction in benefits, and loss of coverage.

AHIP Coverage Blog Posts | 03/08/2010