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- Seniors Could Face $420-$900 in Higher Costs, Reduced Benefits Next Year Due to New Medicare Advantage Rate Cuts
Seniors Could Face $420-$900 in Higher Costs, Reduced Benefits Next Year Due to New Medicare Advantage Rate Cuts
For Immediate Release
February 6, 2014
New Oliver Wyman
report estimates impact of a second consecutive 6 percent rate cut
– 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.
Advantage is the part of Medicare through which private health plans provide
comprehensive medical coverage to seniors and other Medicare
beneficiaries. Approximately 15 million seniors, or roughly 28 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.
Advantage payments were cut by six percent last year, which resulted in cost
increases and benefit cuts of $30-$70 per month for beneficiaries, according to
the Oliver Wyman report. The report estimates that if the program were
subjected to another six percent cut in 2015,
seniors would experience additional benefit reductions and premium increases of
$35-$75 per month, or $420-$900 for the year.
the Medicare agency, each year sets payment rates for Medicare Advantage plans
based on many factors. Preliminary 2015 rates are expected to be
announced by CMS on February 21, 2014, with final rates expected on April 7,
six percent cut to Medicare Advantage payments in 2015 would mean the program
would be hit by a combined 12 percent cut over 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 Oliver Wyman. Cuts of this
magnitude would result in a “significant upheaval in the MA market,” including
the “potential for plan exits, reductions in service areas, reduced benefits,
provider network changes, and reduced MA enrollment,” the report stated.
cannot afford another round of rate cuts to their Medicare Advantage coverage,”
said AHIP President and CEO Karen Ignagni. “CMS should protect seniors in the
program by maintaining current payment levels next year.”
Oliver Wyman analysis notes that additional rate cuts “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 burden.”
view the full report click here.
Coalition for Medicare Choices (CMC) recently launched a national grassroots
and advocacy campaign, called “Seniors are Watching,” urging the Medicare
agency to protect seniors in the program by maintaining current payment levels
learn more about the CMC campaign, visit www.MedicareChoices.org/Seniors-Are-Watching
and follow the coalition on Twitter (@ProtectMyMA) and Facebook.
Providing Health Benefits for Over 200 Million Americans.