AHIP Launches TV Ad Campaign to Stop New Medicare Advantage Cuts

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CMS’ proposed Medicare Advantage Cuts will result in higher costs, fewer benefits for seniors

America’s Health Insurance Plans’ (AHIP) Coalition for Medicare Choices, which represents over 1.3 million Medicare Advantage beneficiaries, is launching a TV and online ad campaign to urge lawmakers to speak out against new cuts to Medicare Advantage recently proposed by the Centers for Medicare & Medicaid Services (CMS). The new cuts combined with the reform law’s deep payment cuts and new health insurance tax will result in Medicare Advantage beneficiaries next year facing higher out-of-pocket costs, reduced benefits, and fewer health care choices.    

The new ad, called “Too Much,” highlights the cumulative impact the Medicare Advantage cuts would have on seniors and urges Congress to help fight these cuts. The ad will run on cable TV, in targeted broadcast markets, and online. Visit the Coalition for Medicare Choices at http://www.MedicareChoices.org to view the new ad.

“Previous cuts to Medicare Advantage resulted in seniors experiencing benefit cuts and premium increases, and many lost their Medicare Advantage coverage altogether,” said AHIP President and CEO Karen Ignagni, citing significant enrollment declines in the early 2000s following cuts to the program. “Urgent action is needed to protect seniors in Medicare Advantage from once again facing significant disruption in their health care coverage.”

Medicare Advantage is the part of Medicare through which private health plans provide comprehensive medical coverage to seniors and other Medicare beneficiaries. More than 14 million Americans, or roughly 28 percent of all Medicare beneficiaries, are enrolled in a Medicare Advantage plan because of the better services, higher-quality care, and additional benefits these plans provide.

CMS recently proposed a 2.2 percent reduction in Medicare Advantage payments for 2014, at a time when medical costs are projected to increase by three percent. The new proposed payment cuts are in addition to the billions of dollars in Medicare Advantage cuts and a new health insurance tax included in the Affordable Care Act (ACA). A recent report from Oliver Wyman estimates that the cumulative impact of these cuts and the new health insurance tax will result in an estimated 6.9 to 7.8 percent cut to Medicare Advantage plans in 2014, leading to benefit reductions and premium increases of $50 to $90 per month for a typical Medicare Advantage beneficiary.

In comments submitted to the agency, AHIP offered a series of recommendations to stabilize the program and avoid significant disruption for seniors enrolled in Medicare Advantage. The 2014 Medicare Advantage payment rates will be finalized on April 1.

The new proposed cuts to Medicare Advantage are coming despite overwhelming evidence that beneficiaries are satisfied with the coverage their Medicare Advantage plan provides. A new survey released this week from North Star Opinion Research found that nine out of 10 seniors are satisfied with their Medicare Advantage plan. Moreover, seniors expressed very high satisfaction with specific aspects of their Medicare Advantage plan, including the quality of care they receive (94 percent), their choice of doctors (92 percent), the benefits they receive (90 percent), preventive care coverage (89 percent), and prescription drug coverage (82 percent).

AHIP recently released a report which found that low-income and minority Medicare beneficiaries continue to rely on the high-quality health care coverage provided by Medicare Advantage plans. According to that report, 41 percent of Medicare beneficiaries with Medicare Advantage coverage had incomes of $20,000 or less. By comparison, 37 percent of all Medicare beneficiaries had incomes of $20,000 or less. In addition, 31 percent of African-American Medicare beneficiaries and 38 percent of Hispanic beneficiaries were enrolled in Medicare Advantage plans.

Fact check on ACA cuts to Medicare Advantage: Current discussions about the impact on seniors of the ACA’s $200 billion in cuts to Medicare Advantage have largely ignored the fact that only four percent of those cuts have gone into effect through the end of 2012. The Congressional Budget Office (CBO) projects that, when fully phased in, these cuts alone will result in three million fewer people enrolled in the program. In addition, Medicare Advantage enrollees also will be impacted by the new health insurance tax established by the ACA that starts in 2014. Oliver Wyman previously estimated that this tax alone will result in seniors facing $220 in higher out-of-pocket costs and reduced benefits next year and $3,500 in additional costs over the next ten years.

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Robert Zirkelbach
America's Health Insurance Plans
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