Obama Administration Reverses Plans For Medicare Advantage Cuts

| by Jared Keever

The Obama administration announced Monday that it will not move forward with proposed cuts to Medicare Advantage plans. The announcement came from the Federal Centers for Medicare and Medicaid Services. The decision turns the proposed 1.9 percent payment cuts for 2015 into a 0.4 percent payment increase.

Medicare Advantage plans are alternatives to Medicare and are offered by private insurers. Recipients of the plans must share in some of the costs, but the plans are thought to be more generous than typical Medicare coverage. According to a story by Talking Points Memo, lawmakers from both parties had opposed the cuts.

It is estimated that the Affordable Care Act — sometimes referred to as "Obamacare" — will cut supplements to the Medicare Advantage plans by $150 million over 10 years. 

Republicans argue that reversing the cuts this year is simply a ploy by the Obama administration to provide political cover for Democrats who voted for the ACA. Members of the GOP were expected to attack the cuts during this year’s midterm elections. 

"Once we get past the midterm elections, it won’t take long until Democrats reinstate these cuts to Medicare,” said Jahan Wilcox, a spokesman for the Republican National Committee.

House Speaker John Boehner, R-Ohio, agrees. In a Washington Post blog, he is quoted as saying that the current reversal of the cuts "does little to address the concerns about Obamacare’s impact on the Medicare Advantage program that millions of seniors rely on every day." 

Health insurers are also concerned that cuts to the program will continue after the elections. The nation’s largest insurance industry lobbying group, America’s Health Insurance Plans, helped turn the proposed cuts — 2.3 percent — for 2014 into a 3.3 percent raise. The group’s CEO, Karen Ignagni, counts Monday’s announcement as another victory, but she is still looking to the future.

“We remain concerned about the impact year-over-year cuts to Medicare Advantage would have on the high-quality, affordable coverage millions of seniors like and rely on today,” she said in a statement.

Some Republicans, though, are cautious when attacking the cuts. And rightly so. The Talking Points Memo story points out that many of them voted for similar cuts when they backed a proposed budget in the House of Representatives drafted by Rep. Paul Ryan, R-Wisc. 

Sources: Talking Points Memo, Washington Post