Democrats in Congress merely want to make Medicare Advantage more efficient, not eliminate the program, according to Rep. Pete Stark, D-Calif.
Stark, the chairman of the House Ways and Means health subcommittee, talked about the program Wednesday. The subcommittee convened the hearing in response to an analysis by the Medicare Payment Advisory Commission, which found that Medicare is, on average, overpaying Medicare Advantage plans by 112%.
“America’s Health Insurance Plans, Blue Cross Blue Shield and others have been falsely claiming that payment reductions will reduce health care access for lower- and moderate-income seniors–and decrying a goal they ascribe to me of wanting to get rid of the Medicare Advantage Plan,” said Stark, a longtime program critic.
But letting any group of Medicare program participants “wall itself off from both scrutiny and from consideration for payment changes…would be irresponsible for this committee,” Stark said.
AHIP, Washington, and the Blue Cross and Blue Shield Association, Chicago, have defended the Medicare Advantage program against the effects of the advisory commission report with a print advertising campaign and release of survey results indicating that both patients and physicians would be concerned if Congress made cuts to the program.
Some Democrats in Congress want to shift appropriations from the Medicare Advantage program to support other programs, such as the State Children’s Health Insurance Program.
In the mid-1990s, Congress changed funding rules for the Medicare managed care program in place at that time, and private insurers left that program in droves.
AHIP and the Blues both said at Wednesday’s hearing that Congress should continue support the current program.
“This hearing offers an excellent opportunity to reinforce for the Congress and the public the critical, value-enhanced health coverage private health plans provide to 8.3 million Americas,” said Scott Serota, president of the Blue Cross association.
Officials from the Centers for Medicare & Medicaid Services also praised the program.
When Stark asked Leslie Norwalk, acting CMS administrator, about the alleged overpayment issue, Norwalk said, “I wouldn’t call it an overpayment. I would call it a payment for added benefits.”
But Medicare advisory commission officials said there are few incentives for efficiency in the Medicare Advantage program.
“Although Medicare Advantage uses ‘bidding’ as the means of determining plan payments and beneficiary premiums, the bids are against benchmarks which are often legislatively set,” said Mark Miller, the commission’s executive director.
“Private insurers are among the least efficient vehicles to provide better benefits to people with Medicare,” said another witness, Robert Hayes, president, of the Medicare Rights Center, New York. “These overpayments to for-profit health plans should be re-directed to provide low and middle income people with Medicare protection against unaffordable out-of-pocket expenses whether they enroll in traditional Medicare or in a for-profit insurance plan.”
But Rep. Earl Pomeroy, D-N.D., noted that only 4,922 Medicare beneficiaries are members of the traditional Medicare program in his state, and that they save only $57.87 a month.
Norwalk argued that basic Medicare benefits for North Dakota citizens should improve, because the program has been growing since 2003, when changes in the Medicare program designed to better serve rural areas were launched.