Payment Cuts for All Types of Medicare Advantage Plans Would Save $54B Between 2009 and 2012, According to CBO
Congressional Budget Office Director Peter Orszag on Thursday at a House Budget Committee hearing said that a reduction of reimbursements to private fee-for-service plans in Medicare Advantage would result in relatively modest savings, CQ HealthBeat reports.According to the Medicare Payment Advisory Commission, reimbursements for MA plans -- which cover extra benefits, such as vision and hearing tests and treatments -- are 12% higher than payments for the traditional program for equivalent benefits, and reimbursements for private fee-for-service plans are 19% higher. Some Democratic lawmakers seek to reduce reimbursements for MA plans "as a way to fund other health care priorities, such as expanded coverage of uninsured children through reauthorization of" SCHIP, CQ HealthBeat reports.
At the hearing, Orszag said that equalization of reimbursements for private fee-for-service plans and traditional Medicare would save $14 billion from 2009 to 2012 and $43 billion from 2009 to 2017. Equalization of reimbursements for all MA plans and traditional Medicare would save $54 billion from 2009 to 2012 and $9.5 billion in 2009 alone, Orszag said.
Other Issues
Rep. Jim Cooper (D-Tenn.) asked about the effect of a proposal that would end the ability of private fee-for-service plans to "deem" physicians contracted when they agree to treat one Medicare beneficiary enrolled in the plans. Some critics have said that beneficiaries enrolled in the private fee-for-service plans who receive treatment from "deemed" physicians pay higher copayments.
Orszag said that such a proposal would require private fee-for-service plans to establish their own physician networks, and former CMS Administrator Mark McClellan said that "long-term use of deeming authority may not be necessary for a well-run (private fee-for-service) plan." Witnesses also discussed out-of-pocket costs for Medicare beneficiaries enrolled in MA plans.
Tricia Neuman, vice president of the Kaiser Family Foundation and director of its Medicare Policy Project, said Medicare beneficiaries enrolled in MA plans have higher copays for some services, such as daily copays for hospital stays and home health visits not required by the traditional program. She said additional benefits and lower cost-sharing in Medicare Advantage plans may be attractive to some beneficiaries, "but beneficiaries are not always better off financially in Medicare Advantage plans than in traditional Medicare" (Carey, CQ HealthBeat, 6/28).
In related news, House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) on Thursday introduced a bill under which MA plans could not charge beneficiaries more than traditional Medicare for services (Edney, CongressDaily, 6/28).
The CBO testimony on Medicare Advantage plans is available online. A related report from CBO is available online. Note: You must have Adobe Acrobat Reader to view the related report.
Testimony from Neuman also is available online. Note: You must have Adobe Acrobat Reader to view the testimony.
