Final 2015 Medicare Advantage cuts could come Monday

The proposed 2015 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies are scheduled to be finalized on Monday, at which point providers and health plans will find out if they will see another cut to the Medicare Advantage program next year.

The cuts in the proposed rule were not as steep as some had feared, and the stocks of health insurance companies actually went up after the administration published the proposed rate and policy changes in the Federal Register in late February. However, that has not stopped the health insurance industry for pushing for the Centers for Medicare and Medicaid Services (CMS) to use every ounce of flexibility it has to eliminate the cuts completely.

According to independent analysis commissioned by America's Health Insurance Plans (AHIP), which represents the U.S. healthcare insurance industry, CMS’s projections that its 2015 rate changes would mean a mere 1.9 percent cut in payments for Medicare Advantage plans is optimistic. In the analysis by consulting firm Oliver Wyman, the total cuts to Medicare Advantage plans in 2015 may add up to 5.9 percent. As a result, seniors with Medicare Advantage plans may end up paying between $35 to $75 more per month for health insurance next year, the Oliver Wyman report found.

Over the past month, AHIP has mobilized seniors to call their legislators about the cuts and succeeded in getting more than 200 Congressional representatives to sign a letter to CMS seeking elimination of the proposed cuts from the final rule due out Monday.

The cuts to Medicare Advantage have been most heavily opposed by Republican legislators because they are part of the Patient Protection and Affordable Care Act (ACA). However on Wednesday, it was Democrats who took to the House floor to speak out against the cuts, as the Republican budget plan released the day before included keeping the ACA’s mandated cuts to Medicare Advantage.

AHIP President and CEO Karen Ignagni also had an editorial published in USA Today, where she warned the cuts would cause millions of seniors to lose their health insurance policies. Her view was countered by the paper’s editorial board, which thought that “forcing Medicare Advantage plans to live with little or no subsidy over government Medicare is entirely fair.”

For healthcare providers, a cut to Medicare Advantage government funding will likely mean an even greater push by healthcare insurance companies for lower reimbursement rates for Medicare Advantage patients and narrower networks of providers.