The head of the American Benefits Council has come out against cuts in federal 2015 Medicare Advantage plan funding.
President James Klein says reductions in support for private alternatives could hurt employer retiree benefits programs.
Some employers use group Medicare Advantage plans to provide retiree health benefits, Klein writes in a letter to Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services.
The group Medicare Advantage plans give retirees more choices, lower out-of-pocket costs, and more care coordination, Klein writes.
“We are particularly concerned that additional rate cuts could result in higher costs and less choice for retirees,” Klein writes.
The Medicare Advantage program lets carriers provide private alternatives to the traditional CMS Medicare program.
Carriers expect CMS to release preliminary program payment rates Feb. 21.
CMS cut Medicare Advantage program support 6.7 percent for 2014.
America’s Health Insurance Plans predicted that imposing a similar funding cut in 2015 would lead to an average of $35 to $75 per month in premium increases and benefits reductions per enrollee.
Jonathan Blum, the Medicare program directory, reported at a hearing in February 2013 that the program was paying about 4 percent more for Medicare Advantage enrollees than for traditional enrollees. The gap was down from 14 percent a few years earlier, but members of the Obama administration and some members of Congress have promoted efforts to eliminate the gap altogether.
When budget analysts put out estimates of the effects of the Patient Protection and Affordable Care Act on the federal deficit, they assumed CMS would eliminate the difference between Medicare Advantage program funding and traditional plan funding.