HHS reverses plan to cut Medicare advantage rates

Administration officials announce that they will slightly boost rates paid to insurers offering the private Medicare plans. In February they had suggested cuts to the funding, but Republican and Democratic lawmakers had opposed the suggestion.

The Wall Street Journal: Medicare Agency Says Payments To Insurers Will Rise In 2015
Federal regulators on Monday said they boosted planned payments to insurers that run private Medicare Advantage plans, issuing final rates that were higher than the cuts regulators proposed in February. The trims were opposed by many Republicans and some Democrats, creating a tough political situation for the Obama administration. These lawmakers said the result could have been higher rates or less choice for some seniors. The insurance industry launched a major lobbying campaign against the reduction (Mathews and Peterson, 4/7).

The Associated Press: Government Hikes Medicare Advantage Pay Estimate
The government has raised its payment estimate for Medicare Advantage plans months ahead of a busy election season during which cuts to the program promise to be a key focus for politicians and voters. The Centers for Medicare and Medicaid Services said Monday that 2015 payments to the plans should increase less than 1 percent overall. That compares to a drop of nearly 2 percent that the government forecast in February (Murphy, 4/7).

Kaiser Health News: Obama Administration Retreats On Private Medicare Rate Cuts
Under intense, bipartisan political pressure, the Obama administration backed down for the second year in a row on proposed payment cuts for insurance companies that offer private plans to Medicare members. After estimating in February that the cuts required by the Affordable Care Act as well as other adjustments would reduce would reduce what it pays insurers next year by 1.9 percent per beneficiary, the Department of Health and Human Services said Monday it would instead give Medicare Advantage plans a raise of 0.4 percent (Hancock, 4/8).

The Washington Post's Wonkblog: Obama Administration Reverses Proposed Cut To Medicare Plans
The reversal comes after a major lobbying effort from the health insurance industry and signals that Republicans would use the cuts to attack Democrats in this year's midterm elections. The Medicare Advantage program, according to the Avalere Health consulting firm, now covers about 16 million seniors, or 30 percent of all Medicare beneficiaries, through private health plans that can offer extra benefits, like wellness plans (Millman, 4/7).

McClatchy: Proposed Cuts To Medicare Advantage Plans Out, Payments Hikes In
Congressional Democrats, many facing tough re-election bids, had recently joined Republicans in asking that these private health plans, known as Medicare Advantage, be spared from payment cuts next year, even though they receive an average of six percent, or $8 billion, more this year to cover their enrollees than it would cost under the traditional Medicare program. The administration had proposed a two percent cut in Medicare Advantage payment rates in February as part of an Affordable Care Act initiative to help bring the payments more in line with the regular Medicare program (Pugh, 4/7).

Reuters: U.S. Government Rolls Back Proposed Medicare Advantage Cut
The Obama administration on Monday rolled back some of the more controversial cuts proposed for privately managed Medicare health plans used by the elderly following pressure from insurance companies and lawmakers. The Centers for Medicare and Medicaid Services (CMS) said that on average, reimbursement for such Medicare Advantage plans in 2015 would rise 0.4 percent, reversing what is said was a 1.9 percent average reduction proposed in February (Humer and Morgan, 4/8).

The Star Tribune: Medicare Advantage Plans Dodge U.S. Cuts
Federal officials said Monday that they have made a series of administrative adjustments to offset cuts to the Medicare Advantage program that will be required under national health care reform. The health insurance industry spent millions of dollars on lobbying and advertising to fight the cuts to Medicare Advantage, which is the private alternative to Medicare. Medicare Advantage costs the government more per patient than traditional Medicare, and the disputed cuts are designed to bring those payments closer together (Spencer, 4/7).