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Report: Seniors to Lose Benefits and Choices as a Result of CMS' Proposed Cuts to Medicare Advantage

On February 21, CMS, released the 2015 advance notice, which include proposed changes to Medicare Advantage payments for next year. According to a new report from Oliver Wyman, these changes, if finalized, would result in a 5.9 percent cut to Medicare Advantage payments in 2015. This would result in seniors facing benefit reductions and premium increases of $35-$75 per month, or $420-$900 for the year, according to the report.

If the new changes proposed by CMS are implemented, the program would be hit by a double-digit cut over just a two-year period, causing cost increases and benefit reductions for seniors of $65-$145 per month, or as much as $1,740 over two years, according to the Oliver Wyman analysis.

Cuts of this magnitude could result in a “high degree of disruption in the MA market,” including the “potential for plan exits, reductions in service areas, reduced benefits, provider network changes, and MA plan disenrollment,” the report stated.

Seniors across the country would feel the impact of these cuts. An updated analysis by Oliver Wyman examines the state-by-state impact of these cuts.

The Affordable Care Act already includes more than $200 billion in payment cuts, the vast majority of which have not gone into effect yet, and imposes a new health insurance tax that begins this year. These were real cuts in payments – not reductions in rates of projected growth.

Seniors will see the impact of any new payment cuts in late October 2014, when they begin enrolling in their 2015 Medicare Advantage coverage. Another round of payment cuts would mean seniors learning that out-of-pocket costs are higher, benefits have been cut, provider access is restricted, and choice of plans is more limited…….

America's Health Insurance Plans - Medicare Advantage