For the third year in a row, payments to health plans for seniors will rise instead of dropping, but insurers and Medicare advocates still aren’t fully enthused.
The Centers for Medicare and Medicaid Services made its annual announcement Monday of the next year’s payment rates to private health plans that contract with Medicare through a popular program called Medicare Advantage.
Average plan base payments will increase by 1.25 percent next year, instead of dropping by 0.9 as the agency originally proposed in February. Officials said the difference isn’t due to policy changes, but because Medicare spending forecasts have since been revised.
The topic is a charged one, as each year the insurance industry lobbies hard against cuts to the program, which covers about 30 percent of all seniors and others on Medicare. They and members of Congress, especially Republicans, point to the program’s popularity and rapidly rising enrollment as arguments for why it shouldn’t be cut.
For the last three years the federal government has initially proposed payment cuts but then opted for increases instead. The Affordable Care Act calls for cuts to Medicare Advantage plans to help pay for the law.
The base payments don’t reflect the total payment change to insurers because other factors are included in the total.
Karen Ignagni, president of the insurers trade group America’s Health Insurance Plans, said the final payment notice takes a “notable step to provide stable funding for the Medicare Advantage Program.”
But she expressed disappointment that the final notice doesn’t make some changes originally recommended in February.
The agency had proposed revising a bonus program for high-performing plans around concerns it disadvantaged plans with many low-income enrollees, but it’s leaving the program in place for now. Officials said they’re still considering changes, but decided to forgo any this year because of negative feedback to their proposal.
“The lack of action to address policy concerns around providing care for the chronically ill and vulnerable populations could undermine health plans’ efforts to address the needs of these beneficiaries,” Ignagni said in a statement.
The Better Medicare Alliance said little Monday about the announcement, simply saying it’s still reviewing the payment policies.
“Actual Medicare Advantage payments are based on a complicated calculation that includes many factors,” said the group’s executive director Krista Drobac. “We will provide comments after we have had the opportunity to fully analyze the final rate notice.”
