It’s January, and with a new year comes a fresh threat to both taxpayers and seniors: Further cuts to Medicare Advantage, courtesy of the Biden administration.
This could occur soon, as the Centers for Medicare and Medicaid Services (CMS) will release a boring-sounding ‘rate notice’ relating to Medicare Advantage in the coming weeks.
Medicare Advantage plans are well-liked private insurance options that stand out from traditional Medicare because they can set payment methods and levels and reject certain providers. This flexibility has enabled Medicare Advantage plans to increase their value, providing better coverage and outcomes than traditional Medicare.
Depending on what CMS does, they could further incentivize seniors to move away from Medicare Advantage plans and toward traditional Medicare fee-for-service.
Studies show that Medicare Advantage greatly aids overall Medicare solvency and delivers better value for taxpayers, consumers and seniors. So what happens in the coming weeks could matter a lot to you, your older relatives and friends, and even your kids and grandkids, who will someday bear the cost of paying for entitlements.
A lot of people missed last year’s stealthy cuts to Medicare Advantage. And for good reason. The government worked hard to keep the cuts on the down low.
The first troubling trick was CMS touting a growth rate for Medicare Advantage of 2.28%, which sounds like an increase, not a cut. But at the time, the country was still experiencing higher than the typical 3% inflation or more, the Congressional Budget Office was projecting a roughly 10% increase in Medicare costs, and Medicare’s Trustees projected annual growth in Medicare per enrollee spending to be 5.4%.
In other words, this growth rate didn’t keep up with rising costs.
Transportation Secretary Pete Buttigieg’s former employer, McKinsey, calculated the changes as amounting to a ‘1.12% effective MA rate decrease.’ This sly cut was accomplished via a make-your-eyes-glaze-over round of bureaucratic decision-making, amounting to the first post-ObamaCare cuts, yet sold as ‘reform.’
That second and third slick trick – boring the public to tears and throwing out the word ‘reform’ – insulated them from criticism you’d usually expect from, well, almost everyone.
But it wasn’t just last year’s cuts that made Medicare Advantage look vastly less appealing than traditional pricey – and insolvency-risking – Medicare. CMS also eliminated 2,000 diagnosis codes, which meant less coverage for seniors in Medicare Advantage plans than conventional Medicare fee-for-service.
CMS also instituted an absurd 48-hour mandatory waiting period for seniors hoping to chat with agents or brokers to discuss insurance options.
Then CMS famously messed around with Medicare Advantage’s star rating program. Insurers say the changes made it incredibly difficult for plans to receive high star ratings. It also appears these changes could squeeze $600 million to $700 million out of Medicare Advantage in 2025. All of this makes Medicare Advantage less appealing to seniors, which is a bad deal for the rest of us as taxpayers and future retirees.
Now we have to wait and see if CMS bureaucrats try to make Medicare Advantage even less attractive again this year through additional cuts and more confusing rules.
And if they do, will anyone call them out?
Despite their concern about the massive national debt, the size of the deficit and the role traditional entitlements play in those issues, many of my fellow Republicans were shockingly quiet about the attacks on Medicare Advantage last year.
This is odd because when Barack Obama was president, basically every GOP elected official, candidate and grassroots activist screamed to the heavens about ObamaCare’s Medicare cuts, effected through slashing Medicare Advantage.
We should be screaming once again. With conservatives likely to be hammered this election year for supposedly wanting to cut entitlements, we should be setting the record straight.
It’s the Biden administration, not Republicans, which is cutting Medicare Advantage benefits and threatening high-quality health care for seniors while making the debt even bigger in the process.
