Republican lawmakers cried foul Friday night over an Obama administration proposal to cut payment rates to private insurers who administer Medicare Advantage, a popular alternative to the government-run health program for seniors.
The Centers for Medicare and Medicaid Services (CMS) announced a proposed cut of 3.55 percent to insurers like Humana Inc. and United HealthGroup Inc., although the reductions would not become final until spring.
Although not a surprise, the proposed cuts come after an intense lobbying effort by the insurance industry against slashing rates, citing the potential for higher costs to seniors, and GOP lawmakers this year are sure to use the cuts as further ammo against the Affordable Care Act and its Democratic supporters.
“The health law cut more than $300 billion from the popular Medicare Advantage program, potentially forcing hundreds of thousands of beneficiaries to find new health care plans, despite the president’s promise,” said Rep. Joe Pitts, Pennsylvania Republican and chairman of a House panel on health. “The cuts announced today will only exacerbate the effect this will have on the health care of millions of our nation’s seniors, leaving them with higher costs and fewer choices.”
About 15 million people, or slightly less than a third of all Medicare recipients, are enrolled Medicare Advantage plans, while the rest rely on the government’s fee-for-service model to reimburse doctors.
CMS officials insisted late Friday that the program is on the right course. It said Medicare Advantage premiums have fallen by 10 percent since the Affordable Care Act passed in 2010, while enrollment has increased to an all-time high 15 million enrollees.
“We believe that plans will continue their strong participation in the Medicare Advantage program in 2015 and beneficiaries will continue to have a wide array of high quality, high value, low cost options available to them while at the same time we are making certain that plans are providing value to Medicare and taxpayers,” said Jonathan Blum, CMS’s principal deputy administrator.