Medicare Actuary Says Changes In Advantage Plans Will Mean Higher Cost For Some Seniors

Politico obtained an analysis by Richard Foster, the actuary for the Centers for Medicare and Medicaid, which that the health law will mean increased costs for seniors in Medicare Advantage plans. He "also tells Senate Republicans that the overhaul will result in 'less generous benefit packages' for Medicare Advantage plans next year. Foster is independent from the administration and non-partisan."

"Democrats have long contended that Medicare Advantage plans – private insurance alternatives to Medicare – overpay private insurers, increasing premiums for everyone," but Republicans say the changes mean some seniors won't be able to keep their plans, "a promise President Barack Obama made during the reform debate," and a key tenet of GOP efforts to roll back the law. "Foster says the additional costs seniors face will be partially offset by other pieces of the law, including reduced cost sharing for Medicare Parts A and B, lower Part B premiums and the filling of the prescription drug donut hole" (Haberkorn, 10/13).

Meanwhile, The Hill reports on a report from the Government Accountability Office: "During debate over healthcare reform in August and September 2009, health insurance company Humana sent letters to 930,000 beneficiaries enrolled in its Medicare Advantage plans warning that the Democrats' law could hurt seniors' benefits. The Centers for Medicare and Medicaid Services directed Humana to stop the mailings Sept. 18 and extended the order to all other Medicare Advantage groups three days later 'Although CMS's actions generally conformed to its policies and procedures,' the report says, 'the ... memorandum ... instructing all MA organizations to discontinue communications on pending legislation while CMS conducted its investigation was unusual'" (Pecquet, 10/13).

California Healthline: While the health law "is slated to produce sweeping changes in the nation's provision of health care ... the bulk of transformative provisions -- from launching health insurance exchanges to introducing new mandates and wellness provisions -- are not slated to take effect for several years." Healthline looks at "how the reform has thus far affected care provision across three vectors: access to insurance, health care services utilization and systemic improvement" (Diamond, 10/13).

Bloomberg reports that the health law will "spend $10 billion over nine years to fund test programs ... A Center for Medicare and Medicaid Innovation, created by the health law passed in March, will approve and oversee grants to programs that offer novel ways to slow medical spending that has grown annually almost 6 percent on average since 2005. Under the overhaul, the center received $5 million in initial funding in fiscal 2010, and is scheduled to get the additional money from fiscal 2011 until 2019. That budget will be used to reduce spending growth for Medicare, the U.S. health plan for the elderly and disabled, through physician and hospital pilot programs that have surfaced from Maine to Washington state over the past five years" (Wechsler, 10/14).