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AHIP Defends Private Medicare Plans

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The Medicare Advantage program does more to help low-income seniors than it does to help higher-income seniors, according to a report by America’s Health Insurance Plans.

AHIP, Washington, presented the report findings here today, just a day before the Senate Finance Committee will hold a hearing on the Medicare Advantage program.

The Medicare Advantage program gives private insurers a vehicle for offering subsidized health maintenance organization, preferred provider organization and private fee-for-service plans to Medicare beneficiaries.

Critics of the Medicare Advantage program, who want to shift some Medicare Advantage funding into health insurance programs for children, have argued that the Medicare Advantage program increases Medicare program expenses and does more to help relatively high-income program beneficiaries than it does to help the poor.

AHIP argues that the reverse is true.

Only 13% of all noninstitutionalized Medicare beneficiaries joined Medicare Advantage plans in 2004, the most recent year for which data is publicly available, but 49% of the beneficiaries with annual incomes under $20,000 were in Medicare Advantage plans, AHIP says.

In the $10,000-$20,000 income bracket, 33% of beneficiaries were in Medicare Advantage plans, and 21% had health coverage from current or former employers. Another 19% had Medicare supplement insurance, and 19% had no supplemental coverage.

The Medicare Advantage program “is a vital safety net,” AHIP President Karen Ignagni said at the press conference.

Medicare Advantage plans are especially important to protecting minority and lower-income seniors, particularly those who fall just above qualifying for Medicaid but are not covered by an employer’s retirement plan, Ignagni said.