Will Cuts to Medicare Advantage Put America’s Seniors at a Disadvantage?

March 13, 2014

by Amanda Conschafter, Blog Editor

Cuts mandated by the Affordable Care Act could cause 4.8 million seniors to lose or drop their Medicare Advantage coverage, predicts the Congressional Budget Office.  Now a new report from Center Forward, a think tank devoted to nonpartisan policy solutions, warns that cuts of this magnitude could not only disrupt care for seniors but also undercut the cost savings that Medicare Advantage provided.

Medicare Advantage – the option for seniors to receive their Medicare benefits through a private insurance plan – has grown in popularity since it first became available in the 1970s.  (It was formerly known as Medicare + Choice.)  Some seniors opt for Medicare Advantage because its network system resembles the employer-sponsored health plans they used previously.  Others enroll because the program encompasses supplemental benefits such as vision and dental coverage and allows for flexible, coordinated care.  For patients with chronic conditions like diabetes, special needs plans are available.

These chronic condition patients in particular demonstrate the program’s fiscal viability, says Center Forward.   Research suggests that Medicare Advantage patients with chronic conditions spend 19 fewer days in the hospital than their traditional Medicare counterparts did.  Data also correlates Medicare Advantage with lower costs and fewer deaths.

These benefits resulted in prior legislation that incentivized access to Medicare Advantage.  But the Affordable Care Act now plans to make $200 billion of direct and indirect cuts to the program. Cuts proposed by the Centers for Medicare and Medicaid Services for 2015 go still further.

Whether because of higher premiums or loss of valued benefits, many seniors will likely lose or drop their Medicare Advantage coverage.  Insurers likewise may stop offering coverage for the program.  To Center Forward, however, one result seems clear: the route to coordinated, cost-effective care for many seniors may be disrupted, and their well-being along with it.

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