New Report: Year-Over-Year Cuts To Medicare Advantage Result In Disruption For Seniors

posted by Clare Krusing

on February 25, 2015

For Immediate Release

Cumulative Impact of Payment Cuts Over Three Years Estimated to Cost Beneficiaries Up to $1,920

Washington, D.C. – Seniors and individuals with disabilities enrolled in Medicare Advantage plans could face further disruption in 2016 if new Medicare Advantage payment cuts recently proposed by CMS take effect next year, according to a new analysis by Oliver Wyman prepared for America’s Health Insurance Plans (AHIP). “Many beneficiaries could lose access to MA plans and their approach to care, which has reduced the incidence of preventable hospitalizations and improved access to primary care,” the report says.

On February 20, CMS released 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 1.2 percent cut to Medicare Advantage payments in 2016 at a time when health care costs are projected to increase. The report estimates that the combined impact of cuts reflected in CMS’s payment notices from 2014-2016 will have cost beneficiaries on average $60 – $160 per month, or as much as $1,920.

Previous payment cuts to Medicare Advantage have already led to greater instability for the millions of seniors who rely on the program. As the authors note, this latest proposed cut, when “combined with the significant cuts that occurred in 2014 and 2015, could result in a high degree of disruption in the MA market.” In the last two years alone, more than one million seniors had to find new plans because their previous coverage was no longer available, according to 2014 and 2015 data from the Kaiser Family Foundation. Moreover, seniors may experience additional changes in their coverage as cuts from the ACA continue to be phased in over the next two years.

“Over the last two years, Medicare Advantage rates have been cut by approximately ten percent. Another cut this year would jeopardize the care coordination and benefits upon which millions of seniors rely,” AHIP President and CEO Karen Ignagni said. “We urge CMS to protect beneficiaries from any further disruption and provide stability to the coverage they depend on.”

Each year, CMS sets payment rates for Medicare Advantage plans based on a number of factors. The new report comes at a time when a growing number of voices are urging CMS to prevent further cuts to Medicare Advantage, including a bipartisan group of 53 senators and a broad array of providers, stakeholders, and seniors across the country. Final payment rates are expected on April 6, 2015.

To view the full report click here.

AHIP’s Coalition for Medicare Choices (CMC) recently launched a new grassroots and ad campaign to protect Medicare Advantage seniors. The CMC’s 1.8 million seniors are writing letters and emails, making phone calls, attending events and engaging on social media to urge policymakers to protect Medicare Advantage from proposed cuts that could impact their coverage. The new ads feature the personal stories of CMC members discussing how Medicare Advantage allows them to keep what matters most.


Providing Health Benefits for Over 200 Million Americans.

" "