Because of the Patient Protection and Affordable Care Act, seniors enrolled in Medicare Advantage plans are paying higher premiums and experiencing a reduction in benefits and disrupted coverage. And that’s just the beginning.
That’s the dire message from America’s Health Insurance Plans, which predicts will hit seniors even harder over the next two years.
In a letter to the Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner in late November, AHIP CEO Karen Ignagni said the Medicare Advantage program faces “severe underfunding” due to the administration’s regulatory actions to the program.
Another message from the carrier group? Let the carriers decide how to best handle the cuts so they can preserve benefits — and that includes being able to cut networks.
“More than 14 million seniors and individuals with disabilities, or roughly 28 percent of all Medicare beneficiaries, have chosen to enroll in a Medicare Advantage plan because of the better services, higher-quality care, and additional benefits these plans provide. While beneficiaries value the program, it is facing a future of severe underfunding due to a combination of legislative and regulatory actions in recent years,” the officials at AHIP wrote.
The Patient Protection and Affordable Care Act includes more than $200 billion in Medicare Advantage payment cuts, most of which haven’t gone into effect yet, and imposes a new health insurance tax that begins next year.
Though there’ve been ominous warnings about Medicare Advantage plan cuts for the past year, benefits experts say those predictions are turning into reality.
Related story: Medicare Advantage cuts hit UnitedHealth earnings
AHIP’s letter highlights an analysis of CMS data showing that seniors in Medicare Advantage will see, on average, more than a 5 percent increase in premiums next year. AHIP also said beneficiaries in more than 2,000 counties across the country in which more than 60 percent of all enrollees live will have fewer plan options compared to 2013 and many will face higher out-of-pocket costs for Medicare benefits.
“Many Medicare beneficiaries have no idea about the Medicare funding cuts built into PPACA and what they could potentially do to their Medicare Advantage coverage,” Taylor Martin, chief marketing officer for Senior Security Benefits Inc. in Fort Worth, Texas, told Benefits Selling in September.
Additionally, Avalere Health said the total number of MA plans will decline 5.3 percent in 2014 due to continued payment reductions enacted under PPACA.
To work around the cuts, some carriers providing Medicare Advantage plans are dropping doctors from their networks in an effort to improve their star ratings and save money. UnitedHealth also just announced it was cutting thousands of doctors from its networks.
Though that move has drawn opposition, including from the affected doctors themselves, AHIP says those cuts are necessary to avoid increasing premiums. Ignagni said that despite the cuts, reduced Medicare Advantage networks — such as UnitedHealth’s — still meet network adequacy standards set by CMS.
Ignagni urged the agency to resist efforts to “limit the ability of Medicare Advantage plans to establish high-value provider networks because this could result in benefit cuts and higher out-of-pocket costs for seniors, particularly at a time when the program is facing an unprecedented level of payment cuts.”
Over the next year, AHIP warns, seniors will be hit harder by PPACA’s cuts.
“The impact of the MA funding cuts is likely to continue to grow in 2015 and beyond. The continued phase-in of the ACA reductions, in combination with the end of the Quality Bonus Demonstration Project and the other cuts cited above, means it is imperative that MA plans be provided with the flexibility to implement delivery system reforms that have the potential to promote quality and efficiency and will allow them to continue their efforts to demonstrate improved Star Ratings,” the letter said.
AHIP is continuing its campaign to protect Medicare Advantage plans from additional cuts with a new ad campaign called “Seniors are Watching.” Led by AHIP’s Coalition for Medicare Choices, the campaign highlights seniors’ opposition to any new cuts to Medicare Advantage as Congress debates the budget this fall. They have 1.5 million senior members.