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Insurers raise warning over Medicare rate cuts


Another alarm has been sounded by health insurers over potential price hikes and benefit cuts for seniors should the U.S slash Medicare Advantage reimbursements again.

You can expect the clamor to grow louder given that the fight in this corner of the health industry runs through political and corporate circles equally, with the potential to tip control of Congress, as well as shape a massive source of future growth for insurers.

This week, in a study commissioned by the trade group America's Health Insurance Plans, or AHIP, researchers found that Medicare Advantage customers could see benefits decline, and rates could go up between $35 and $75 a month next year.

Translation: You're going to pay more and get less.

Insurers and industry experts have been throwing around their estimated potential rate cuts since the federal government released preliminary information last week regarding rates next year for these privately run versions of the federal government's Medicare program.

That information pointed to rate cuts of only around 1.9 percent for next year, but the actual impact could be much steeper after adding in other factors like reimbursement reductions and a premium tax called for in the health care overhaul.

Every time money is shifted around to pay for the health overhaul, another layer of data and talking points are rolled out, as they were this year, with opposing sides in the political and corporate fight trying to win the hearts and minds of voters who will use the programs, or who will be affected in one way or another.

Insurers say these cuts, when paired with the rising cost of health care, force them to trim benefits, raise prices or leave some markets entirely.

Medicare Advantage customers of course should pay attention, but they should also avoid becoming resigned to the prospect of big changes in their coverage.

Final rates for 2015 won't come out until April 7, and AHIP, which spends millions lobbying Congress every quarter, is pushing aggressively to soften any cuts. It's launched a multi-media marketing campaign entitled "Seniors are Watching" to remind Congress that, well, seniors are watching.

AHIP, which also contributes nearly equally to Republican and Democratic Congressional candidates, has already won the support of 40 senators from both parties who, in a Feb. 14 letter, called on the Obama administration to essentially hold Medicare Advantage rates steady. That list includes six Democratic senators in contested races whose outcome will determine whether Obama faces a Congress next year that's completely controlled by Republicans.

The Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner told the senators that CMS is aware of the changes Medicare Advantage plans face and is open to suggestions for handling payment challenges.

Analysts expect the government to make some sort of adjustment to ease any rate cuts.

After all, Medicare Advantage plans now serve nearly 16 million people, or about 30 percent of all Medicare beneficiaries.

Steep cuts would create a lot of unhappy voters next fall and no one wants to be the target of a political attack ad, accused of leaving seniors in a lurch, with so much at stake in these elections.


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