Medicare Advantage Cuts

We all heard during the elections how President Obama and Presidential hopeful Mitt Romney argued about the Medicare Advantage cuts from the Affordable Care Act.  Mitt Romney sited that there was over 700 billion in MA cuts, while President Obama argued that this was absurd.  Well the truth came out this week when Medicare Advantage cuts appeared larger than anticipated.

Medicare Advantage Cuts

The last week of February, the Centers for Medicare and Medicaid Services announced a further cut of 2.3% in Medicare Advantage Payments in 2014.  This sent the Medicare Advantage Plans into an uproar stating that they were already getting close to a 5% cuts to their plan and adding this 2.3% would put them right at 7% cut.

The insurance companies were not the only ones who noticed these cuts.  Companies that are publicly traded and offered MA Plans all took a hit.  Some companies like Humana and United Healthcare took large hits (roughly 8%).

Medicare Advantage Cuts

Medicare Advantage Plans verse Medicare Supplement Plans

What do these Medicare Advantage cuts mean?

To a consumer these Medicare Advantage cuts mean either a loss of benefits, higher premiums or both.  AHIP recently released a statement that members will probably get some unpleasant surprises in 2014 plan year.  Some of the possible changes could be premium increases from $50-$90 per month or cut in benefits.

If premiums increase and benefit are cut we are expecting Medicare Supplement plans to increase enrollments.  These plans supplement Original Medicare and pick up the deductibles, coinsurance, and co-pays that accompany covered Medicare services.  Medicare Supplements normally have higher premiums than Medicare Advantage Plans, but they do provide much more extensive coverage.

These Medigap plans also do not limit providers available, but MA plans do limit their members to specific networks which is the major issue with people who have enrolled in a MA Plan.  Basically these MA cuts will stir up some change in the Medicare market towards the end of 2013 (Annual Election Period) so people have a chance to change prior to the 2014 plan year.


2 thoughts on “Medicare Advantage Cuts

  1. Medicare Advantage is a privately run Medicare program – run by Insurance Companies – that uses Government money (YOUR money) to not only pad THEIR bottom line, but to pay THEIR network of Doctors and Hospitals.

    “Medicare Advantage plans design benefits so that they are unattractive to people with costly conditions or high risks of needing expensive treatments – steering them into traditional Medicare. This insulates Medicare Advantage plans from financial risk while shifting costs to Taxpayers.”

    “In 2008, the federal government spent 12 percent more on Medicare Advantage than it did for comparable care under traditional Medicare. These subsidies added an additional $14 billion to the Medicare program in 2009.”

    So YOU pay MORE for Health Care for people who need it LESS.

    Guess who doesn’t want Medicare Advantage payments cut?

    Guess who’s going to pay for those Insurance Company execs’ , Hospital Administrators’, and Doctors’ new cars, new houses, and new yachts?

    Guess who benefits when Republicans lie about Health Care? (Hint: it’s not YOU).

    • John –

      I agree that Medicare Advantage plans are costing us more than they are providing (112% of original Medicare). In my opinion they have become another entitlement program that is costing everyone more to be able to give more benefits away (similar to the Affordable Care Act). Our government right now is in the giving business and unfortunately that comes back on the taxpayers through additional taxes.

      Just so you know this article was from a while back, there was another delayed cut this week which makes it roughly a 10% delayed cut over the past two years.

      Thanks for your comment.

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