AHIP Statement On Medicare Advantage

posted by Clare Krusing

on September 21, 2015

For Immediate Release

Washington, D.C.  America’s Health Insurance Plans (AHIP) President and CEO Marilyn Tavenner released the following statement in response to today’s announcement by the Centers for Medicare and Medicaid Services on enrollment and premiums in Medicare Advantage next year:

“As the country transitions to a patient-centered health system, Medicare Advantage is the foundation for care delivery that offers beneficiaries both quality of care and quality of life. While a growing number of seniors are choosing Medicare Advantage, recent policy changes could jeopardize health plans’ efforts to care for the chronically ill and vulnerable populations who increasingly rely on the program for their health needs. That’s why policymakers recently introduced bipartisan legislation that would protect and strengthen the program for the future. Seniors value Medicare Advantage, and they will continue to make their voices heard to ensure that this important coverage option is preserved.”

Background on Medicare Advantage

  • Approximately 17 million beneficiaries – accounting for more than 30 percent of all Medicare beneficiaries nationwide – have chosen to enroll in a Medicare Advantage plan.
  • Peer-reviewed research has shown that Medicare Advantage plans are more effective than the Medicare FFS program at addressing crucial patient care issues facing the nation, including reducing preventable hospital readmissions, increasing primary care visits, and managing chronic illnesses.
  • Additional research states Medicare Advantage plan efforts “spillover” to the rest of the health care system, and result in more effective hospital services, including lower hospitalization costs and shorter lengths of stay.  The analysis finds that a 10 percent increase in MA penetration is associated with a 2.4 percent – 4.7 percent reduction in hospital costs for other patients.
  • Medicare Advantage plans continue to provide value to their enrollees despite recent legislative and regulatory actions to reduce payment. These ongoing cuts threaten health plans’ efforts to provide affordable options to enrollees.
    • The Affordable Care Act (ACA) includes more than $200 billion in cuts to Medicare Advantage. The ACA also imposed a health insurance tax that began in 2014. Oliver Wyman, an actuary firm, estimates that this tax alone will result in seniors with Medicare Advantage facing $220 in higher out-of-pocket costs and reduced benefits next year and $3,500 in additional costs over the next ten years.
    • The American Tax Relief Act of 2012 (ATRA) cut an additional $5 billion from Medicare Advantage.
    • The Budget Control Act (2013) reduced funding to Medicare Advantage by an additional two percent due to sequestration.
    • For 2016, CMS will fully phase in a new risk adjustment model that cuts funding for early intervention programs, which include initiatives that identify and treat conditions, like chronic kidney disease and diabetes, at their earliest stages and prevent their progression.


Providing Health Benefits for Over 200 Million Americans.

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