Health Subcommittee Finds Health Law’s #BrokenPromises Will Soon Hit Medicare Advantage Beneficiaries

December 4, 2013

WASHINGTON, DC – The House Energy and Commerce Health Subcommittee, chaired by Rep. Joe Pitts (R-PA), today examined how the president’s health care law will impact the Medicare Advantage program and what beneficiaries should expect in the coming year. The health care law raided $700 billion from Medicare, including $300 billion from Medicare Advantage alone, in order to fund the new entitlement. These cuts will begin to be fully realized in the next year, and seniors and disabled Americans who rely on Medicare Advantage will soon suffer the consequences. Today’s hearing underscored recent revelations that the president’s promises that you could keep your doctor and you could keep your health care plan will not hold true.

Chairman Pitts stated, “A recent report by the Kaiser Family Foundation warned that more than half a million beneficiaries may have to switch to another MA plan or return to fee-for-service Medicare in 2014, as a result of ACA. In addition to plan availability, questions are now being raised about the possibility of rising costs and limited provider networks in the future as more ACA-mandated cuts go into effect.”

Subcommittee Vice Chairman Michael C. Burgess, M.D. (R-TX) noted, “It appears in Washington today there is a crisis in confidence. The president has sold the Affordable Care Act on just a raft of false premises. You can keep your plan, false. You can keep your doctor, false. These are broken promises and these, in fact, are the opportunity costs that Americans are paying for the Affordable Care Act. There was a promise made to seniors as well. The promise was that we’re going to use your Medicare dollars as a piggy bank to fund the Affordable Care Act, and in doing that we’ll improve Medicare and allow seniors to keep their doctors if they liked. So, do you have an opinion as to whether or not this is another broken promise?”

Doug Holtz-Eakin, President of the American Action Forum, responded, “It is. … The regulations and the funding are at odds with the promise. The promise can’t be held true.”

Watch the complete exchange here.

Full Committee Chairman Fred Upton (R-MI) commented, “Empty promises may be of little concern to this administration, but they have real consequences for the Americans who expect Washington to do no harm. Americans deserve to know why their existing coverage is changing when they were promised otherwise.”

Holtz-Eakin explained that those hurt by this broken promise are among the nation’s most vulnerable. “The Medicare Advantage cuts are already having a negative impact on enrollment and seniors’ plan choice. Those most hurt by the cuts are low-income seniors in rural areas without other options for supplemental Medicare coverage. Additional scheduled cuts in the future will broaden the damage to Medicare Advantage.”

The Medicare Advantage program has been extremely popular and successful and should serve as a model for reforming the Medicare program broadly. The cuts made in the health care law, however, threaten the future of the already strained program.

Robert Margolis, CEO of HealthCare Partners and Co-Chairman of DaVita HealthCare Partners, testified, “The MA program is under severe stress due to a number of cumulative cuts to the program, including reductions to MA plan benchmarks; coding intensity adjustment; changes to CMS’s risk adjustment methodology; sequestration; and the tax on health insurers. Benchmark reductions alone were intended to bring MA to parity with the original Medicare. Additional layered reductions cut deeply into the MA program and flow to patients in the form of fewer physician choices, fewer benefits and increased patient costs. The cuts have the net effect of pushing seniors away from MA and into the fragmented FFS delivery model.” 

Chairman Pitts explained, “MA plans may offer additional benefits not provided under Medicare FFS, such as reduced cost sharing or vision and dental coverage. They also generally have a high rate of satisfaction, and approximately 28 percent of Medicare beneficiaries have chosen to participate in Medicare Advantage.”

Jon Kaplan, Senior Partner and Managing Director of Boston Consulting Group, added, “Medicare Advantage plans are an example of a successful public-private partnership. These plans represent an integrated care-delivery model that uses effective provider incentives, real-time clinical data and analysis, and care coordination capabilities to improve quality and lower costs. Medicare Advantage plans also represent a proven model from which the entire system can learn.”

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