Insurers’ lobby hits back at Medicare Advantage cuts, cites report that seniors will pay more

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A fresh Obama administration proposal to cut payments to Medicare Advantage, an insurer-run alternative to the government program for seniors, would raise costs for seniors by $420 to $900 per year, an insurance industry group said Thursday.

America’s Health Insurance Plans said if the plan put forth last week by the Centers for Medicare and Medicaid Services (CMS) comes to pass, combined with last year’s cuts the agency will have slashed the popular program by double digits.

They cited figures from a report that Oliver Wyman, a consulting firm, prepared on the group’s behalf.

AHIP said the proposed cuts will disrupt the market and cause prices to rise among the 15 million people who rely on Medicare Advantage instead of Medicare’s traditional fee-for-service model.

“CMS should keep Medicare Advantage payment rates flat next year to protect seniors from another round of harmful cuts that would put at risk the high-quality coverage they like and rely on today,” AHIP President and CEO Karen Ignagni said in a prepared statement.

Ms. Ignagni said 29 percent of all seniors in Medicare prefer the Medicare Advantage option, and that a series of legislative and regulatory moves dating back to the Affordable Care Act have slashed the program at unacceptable levels.

Republican lawmakers have rallied around the cause and accused the Obama administration of robbing a popular program to pay for its health care overhaul.

But the administration says the program is on sure footing and that premiums have fallen by about 10 percent since Congress passed the health care law in 2010.

Senate Democrats also pushed back this week, saying the cuts are designed to strengthen the Medicare program overall through a fair payment scheme.

“We’re just making sure that it’s not wasteful,” Sen. Barbara Boxer, California Democrat, said.

She was among five Democrats who told reporters this week the health care law’s benefits far outweigh negative stories put forth by Obamacare’s “haters.”

Sen. Roy Blunt, Missouri Republican, said Thursday that’s not the case, even as leading Democrats charge that conservatives are inventing many of Obamacare’s horror stories.

“I think too many people have true stories to tell,” Mr. Blunt said on the Senate floor.

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