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New Report: Seniors to Lose Benefits and Choices as a Result of CMS’ Proposed Cuts to Medicare Advantage
For Immediate Release
February 27, 2014
proposal would cut Medicare Advantage payments
by 5.9 percent in 2015;
to face $420-$900 in higher costs, reduced benefits
next year if cuts are
Washington, D.C. – 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.
On Friday, February 21, CMS, the Medicare agency, released
the 2015 advance notice, which include proposed changes to Medicare Advantage
payments for next year. According to the 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.
A previous analysis by Oliver Wyman found that Medicare
Advantage payments were cut by 4-6 percent last year, which resulted in cost
increases and benefit cuts of $30-$70 per month for beneficiaries. 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 latest 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.
“CMS should keep Medicare Advantage payment rates flat next
year to protect seniors from harmful cuts that would cause them to face higher
costs and lose benefits and choices upon which they rely today,” said AHIP
President and CEO Karen Ignagni.
Ignagni noted that the Medicare Advantage program has strong
bipartisan support, citing a recent letter from a bipartisan group of 40
senators urging CMS to “maintain payment levels that will allow MA
beneficiaries to be protected from disruptive changes in 2015.” A broad
array of organizations – representing employers, providers, consumers, and
health care stakeholders – also sent letters urging
the agency to keep rates flat to protect seniors from further harm.
The Oliver Wyman analysis notes that the rate cuts proposed
by CMS “would disproportionally affect beneficiaries with low incomes,
including the 41% of MA enrollees with annual incomes below $20,000 for whom
the potential increase in out-of-pocket costs would constitute a significant
Final Medicare Advantage payment rates will be
announced on April 7, 2014. Seniors will see the impact of any new payment cuts in late October 2014, when
they begin enrolling in their 2015 Medicare Advantage coverage.
To view the full report click here.
AHIP’s Coalition for Medicare Choices (CMC) recently
launched is largest-ever mobilization to urge Washington to protect seniors by
maintaining current payment levels in 2015. The advocacy campaign includes
television, digital, print, and display advertising in key markets around the
country and in Washington, D.C. and grassroots mobilization of CMC’s 1.5
million Medicare Advantage beneficiaries. To learn more about
the CMC, visit www.MedicareChoices.org and
follow the coalition on Twitter (@ProtectMyMA)
Providing Health Benefits for Over 200 Million Americans.