Democrats in Congress are not planning to eliminate the Medicare Advantage program offered by insurers–despite their claims to the contrary–the chairman of the Health Subcommittee of the House Ways and Means Committee said on March 21.
“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 Rep. Pete Stark, D-Calif.
But, said Stark, a long-time critic of the program, “… neither should we allow any Medicare provider sector to wall itself off from both scrutiny and from consideration for payment changes. Doing so would be irresponsible for this committee.”
Stark made these comments in his opening statement at a hearing on the program, which Democrats called based on an analysis by the Medicare Payment Advisory Commission that indicates Medicare is, on average, overpaying Medicare Advantage plans by 112%.
Stark’s comments were made against the background of a full court publicity press by AHIP and others, including a coordinated print advertising campaign and release of a survey indicating that both patients and physicians would be concerned if Congress makes cuts to the program.
AHIP and the Blue Cross and Blue Shield Association both released statements at the hearing recommending that Congress continue support. “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 association, Chicago.
And–throughout more than 90 minutes of testimony, cross-examination by Stark and other members of the Committee, and an extensive data presentation–officials of the Centers for Medicare & Medicaid Services also voiced support for the program.
For example, in response to a question by Stark regarding the overpayment issue, Leslie Norwalk, acting administrator of CMS, said: “I wouldn’t call it an overpayment. I would call it a payment for added benefits.”
Democrats on the committee are seeking to use the MedPac recommendations to cut appropriations for Medicare Advantage going forward and use those funds to provide for or expand other healthcare programs, such as the State Children’s Healthcare Insurance Program (SCHIPS). That program is running short of money, and Democrats want to open it to adults–in some cases, going forward by using some of the alleged overpayments to Medicare Advantage providers to pay for it.
In testimony about the program, MedPac officials contended that Medicare Advantage “has become a program in which there are few incentives for efficiency.”
“Although Medicare Advantage uses ‘bidding’ as the means for determining plan payments and beneficiary premiums, the bids are against benchmarks which are often legislatively set,” explained Mark Miller, executive director of MedPac.
He was supported by officials of the Medicare Rights Center, a New York-based advocacy organization and source of information on healthcare and assistance for people with Medicare.
“Private insurers are among the least efficient vehicles to provide better benefits to people with Medicare,” said Robert Hayes, its president, in a statement released at the hearing. “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, pointing to the complexity of the issue, Rep. Earl Pomeroy, D-N.D., noted that only 4,922 Medicare beneficiaries are members of the program in his state, and they save only $57.87 a month, according to data prepared by CMS.
Norwalk replied that benefits to citizens in North Dakota should improve because the program has been growing since 2003, when changes in the Medicare program designed to better serve rural areas were launched.
The 2 surveys, unveiled Tuesday by America’s Health Insurance Plans, Washington, in an effort to pre-empt the hearing, asked physicians if the proposed cuts would concern them and their patients, were they to go without treatment under a reduced Medicare Advantage plan.
These 2 surveys were conducted by Alexandria, Virginia-based Ayres, McHenry & Associates and the Glover Park Group in Washington.
“Seniors and their physicians agree that Medicare Advantage is a vital health coverage option,” said AHIP president and chief executive officer Karen Ignagni. “As members of Congress engage in budget discussions, they will be hearing from their low-income and minority constituents who count on the essential benefits and lower out-of-pocket costs Medicare health plans provide.”
Ignagni said that what lawmakers see and hear when they talk to constituents in their districts will drive the debate on Capitol Hill, along with national and district-by-district data provided by AHIP.
Ignagni also noted results of the survey demonstrating that lower income beneficiaries are most likely to suffer from cuts to the Medicare Advantage. Of those in a Medicare Advantage program, 62% of respondents with an annual income of less than $20,000 said they would skip treatments rather than pay the costs out-of-pocket. Of those making between $20,000 and $30,000 annually, 41% said they would skip treatments, compared to just 35% when all income levels were included.
Currently, the majority of seniors are happy with the program, with the survey finding that 90% of respondents were very or somewhat satisfied.
Many physicians also expressed concern over the effect of cutting the Medicare Advantage program. A strong majority, 74%, said they believe cuts would have a negative effect on seniors, while only 16% said it would have no effect.