GOP lawmakers, trade groups rail against proposed Medicare Advantage cuts

Republican lawmakers cried foul Friday night over an Obama administration proposal to cut payment rates to private insurers who administer Medicare Advantage, a popular alternative to the government-run health program for seniors.

The Centers for Medicare and Medicaid Services (CMS) announced a proposed cut of 3.55 percent to insurers like Humana Inc. and United HealthGroup Inc., although the reductions would not become final until spring.


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Although not a surprise, the proposed cuts come after an intense lobbying effort by the insurance industry against slashing rates, citing the potential for higher costs to seniors, and GOP lawmakers this year are sure to use the cuts as further ammo against the Affordable Care Act and its Democratic supporters.

“The health law cut more than $300 billion from the popular Medicare Advantage program, potentially forcing hundreds of thousands of beneficiaries to find new health care plans, despite the president’s promise,” said Rep. Joe Pitts, Pennsylvania Republican and chairman of a House panel on health. “The cuts announced today will only exacerbate the effect this will have on the health care of millions of our nation’s seniors, leaving them with higher costs and fewer choices.”

About 15 million people, or slightly less than a third of all Medicare recipients, are enrolled Medicare Advantage plans, while the rest rely on the government’s fee-for-service model to reimburse doctors.

CMS officials insisted late Friday that the program is on the right course. It said Medicare Advantage premiums have fallen by 10 percent since the Affordable Care Act passed in 2010, while enrollment has increased to an all-time high 15 million enrollees.

“We believe that plans will continue their strong participation in the Medicare Advantage program in 2015 and beneficiaries will continue to have a wide array of high quality, high value, low cost options available to them while at the same time we are making certain that plans are providing value to Medicare and taxpayers,” said Jonathan Blum, CMS’s principal deputy administrator.

But top Republicans like House Majority Leader Eric Cantor of Virginia jumped all over Friday’s proposal, saying Democrats are taking another swipe at a popular program after Obamacare ushered in a first round of cuts.

“ObamaCare has already caused millions to lose the healthcare plans they liked, and now it is directly harming seniors who rely on the care they have through Medicare Advantage,” he said. “Our nation’s grandparents should not have to wake up tomorrow worried they no longer can access the care they want because of ObamaCare.”

The move is also a setback to trade groups who lobbied hard against the cuts in TV ads and through other means, arguing the cuts could destabilize rates.

“You know, we vote,” an elderly woman says in one frequently aired ad.

America’s Health Insurnace Plans has frequently warned the government not to slash Medicare Advantage payments and will likely redouble their efforts to combat Friday’s proposal.

“Another round of payment cuts would be devastating to the more than 15 million seniors and people with disabilities that have chosen to enroll in Medicare Advantage for the better benefits and higher quality coverage these plans provide,” AHIP Presidnet and CEO Karen Ignagni said.

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