By the Numbers: How the Administration’s Raid on Medicare Advantage Creates More #BrokenPromises

March 11, 2014

The Obama Administration’s Cuts to the Medicare Advantage Program Threaten the Care of Seniors and Individuals with Disabilities

Members of the Energy and Commerce Committee have warned for months that seniors will not escape the harsh reality of the president’s broken health care promises. The president’s health care law raids more than $700 billion from Medicare, including more than $300 billion from the Medicare Advantage program, and uses it to fund a program that does nothing to improve health care for seniors. These cuts will lead to canceled plans, lost access to doctors, and higher costs for seniors. What’s more is that the administration announced additional cuts to the Medicare Advantage program in late February, further straining the program.

This week the committee will again review how the administration’s raid of Medicare Advantage threatens seniors’ access to care at a hearing Thursday, Keeping the Promise: Allowing Seniors to Keep Their Medicare Advantage Plans If They Like Them. A number of outside estimates highlight the harm these cuts will have on the popular Medicare Advantage program:

HIGHER COSTS

Based on the February announcement alone, actuaries at Oliver Wyman estimate that Medicare Advantage faces 5.9 percent in cuts next year. This could lead to premium increases and benefit reductions of anywhere from $35 to $75 per month. The link also includes a state-by-state breakdown of the effects.

The American Action Forum estimates that the health care law’s cuts to the Medicare Advantage program will lead to $65 to $145 more costs per month (or $780 to $1740 more per year) for each beneficiary.

Beneficiaries who choose to keep their current health plans, when available, will pay 14 percent more in premiums according to the Kaiser Family Foundation.

Kaiser Family Foundation also found that the average out of pocket costs increased over $400 from $4,333 in 2013 to $4,797 in 2014. The report also notes, “the share of plans with a limit exceeding $5,000 is higher in 2014 than in 2013 (41 percent versus 25 percent, respectively).”

FEWER CHOICES

According to the Centers for Medicare and Medicaid Services, more than half of new enrollees in Medicare in 2012 chose a Medicare Advantage plan.

Medicare Advantage has already seen a 5.3 percent decrease in the plans offered to beneficiaries from 2013 to 2014, according to Avalere Health.

The Kaiser Family Foundation found that 60 fewer plans were offered in 2014 when compared to 2013. 

###