Insurers say Medicare Advantage cuts are too risky

America’s Health Insurance Plans is pushing back against proposed cuts to Medicare Advantage payments, saying it will put those patients at risk.

The Obama administration proposed the 2 percent cut late last week.

AHIP said Thursday payment changes will especially hurt low-income and minority seniors. The organization also slammed the timing, saying an additional cut to Medicare Advantage payments next year is especially harmful when the program is already facing "significant payment cuts and a new health insurance tax included in the health care reform law."   

Medicare Advantage is the part of Medicare through which private health plans provide comprehensive medical coverage to seniors and other Medicare beneficiaries. More than 14 million Americans—or roughly 28 percent of all Medicare beneficiaries—are enrolled in a Medicare Advantage plan because of the good services, high-quality care and additional benefits these plans provide, AHIP says.

AHIP researchers say that that Medicare Advantage plans are more effective than the fee-for-service part of Medicare at addressing crucial patient care issues, including reducing preventable hospital readmissions, increasing primary care visits and managing chronic illnesses. 

“Medicare Advantage is a lifeline for millions of low-income and minority Medicare beneficiaries who rely on the high-quality coverage and innovative programs and services these plans provide,” AHIP President and CEO Karen Ignagni said in a statement.

AHIP’s research also notes that Medicare Advantage plans are most popular among black and Hispanic seniors. About 41 percent of Medicare beneficiaries with Medicare Advantage coverage had incomes of $20,000 or less. By comparison, 37 percent of all Medicare beneficiaries had incomes of $20,000 or less.

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