CMS Plans Medicare Advantage Cuts

medicaidThe Centers for Medicare and Medicaid Services (CMS) is proposing a 3.55% cut in payment rates to Medicare Advantage insurers. A bipartisan group of 40 senators sent a letter to CMS protesting the cuts. A broad array of organizations also sent letters urging the agency to keep rates flat to protect seniors.

Medicare Advantage payments were cut 6% last year, which resulted in cost increases and benefit cuts of $30 to $70 per month for beneficiaries, according to an Oliver Wyman report. With another six percent cut in 2015, seniors would experience additional benefit reductions and premium increases of $35 to $75 per month, or $420 to $900 for the year, the report estimates. The Affordable Care Act already includes more than $200 billion in payment cuts — the vast majority of which have not gone into effect yet. The ACA also imposes a new health insurance tax, which begins this year.

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. These are real cuts in payments, not reductions in rates of projected growth, according to a statement by America’s Health Insurance Plans (AHIP). Seniors will see the effect of any new payment cuts in late October 2014 when they begin enrolling in their 2015 Medicare Advantage coverage.

As CMS prepares to set 2015 Medicare Advantage payment rates, AHIP 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 payment levels.

Last Updated 08/10/2022

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