Health Plans awaiting verdict in 2010 Medicare Advantage Cut

(BestWire Services Via Acquire Media NewsEdge) Health plans expect to hear a final decision on 6 April immediate cuts proposed by the Obama administration to the Medicare Advantage program, while the long-term future of the program remains quite in doubt, according to Alissa Fox, Senior Vice President of the Office of Policy and representative of the Blue Cross and Blue Shield Association.

Under a proposal unveiled last month by the Centers for Medicare and Medicaid Services, CMS used its authority to reduce reimbursements to Medicare Advantage plans by 5% from January 2010. Health insurers have protested against the cuts as damaging to the program, with more to submit written comments to the agency noted that, taking into account medical inflation average, it would have the effect of a reduction of 10 % of MA plans.

"The proposed cut would hit all Medicare Advantage plans across the board of directors - HMO, PPO in addition to private service charge plans. It would be the same all the counties, urban, rural, everywhere , east (or) west - and would be most devastating for low-income seniors who are on tight fixed incomes, "said Fox during a telephone information with journalists. She added that BCBSA actuaries estimate the impact would be a combination of a premium increase or benefit reductions of $ 50 to $ 80 per month per beneficiary. CMS has until April 6 to unveil the final version of the rate structures for 2010.


At these rates, many beneficiaries of the likely drop plans to traditional Medicare, and up to one third may choose to go naked, without cover at all, "said Fox. She noted that the budget cuts fees will be reduced by 21% next year, although most of Congress to take action before the end of the year to avoid the scheduled physician payment cuts, while as he made seven consecutive years.

But the 2010 cuts would be mild compared to the administration of long-term plan for the program, which was established in 2003, the Modernization Act of disease as a means for private plans to combine and manage different offers additional disease under one heading.

As part of its budget for fiscal year 2010, unveiled last month, President Barack Obama proposed a plan to cancel $ 634 billion in a reserve fund to finance health care reform transition. While supporting the concept of funds in general, Blues plans - which cover 10 million of the 1.6 million enrolled in Medicare Advantage today - are concerned that the $ 177 billion total would be financed by reductions in MA, Fox said.

Speaking earlier this month to America's Health Insurance Plans National Policy Forum, White House Budget Director Peter Orszag said current subsidies in the Medicare Advantage system are too high and can not be justified (BestWire, March 10, 2009). Medicare Advantage plans are paid $ 1,000 per beneficiary more than the cost of servicing the same beneficiary under traditional fee-for-service Medicare.

As part of a tender offered by Obama, MA plans submit bids in each region, as they do today. However, instead of a reference point set by law, as is done today, the payment of Medicare Advantage plans will be based on the average of the bids submitted. It is weighted by a system based on the inclusion of the previous year.

According to Fox, the cuts to devastate the control of the program and return to the disease once the problems encountered in the ability to provide care coordination and management in its traditional form of service charges.

"We recognize that the cuts will be made to this program and we want to work with Congress and administration to ensure sustainable development of the Medicare Advantage program that balances quality and efficiency with the need to provide predictable and stable premiums and benefits for beneficiaries, "Fox said. "It's so difficult for the beneficiaries, if you cut their benefits for a year or their premiums increase significantly from year to year, they're just on the fixed income and it is just a terrible consequences for them. " (By RJ Lehmann, director of the Washington office: raymond.lehmann @ ambest.com) Copyright? 2009 h Best Company, Inc.