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Medicare Advantage Faces Major Funding Threat, Coalition Fights Back

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Juliegrace Brufke Capitol Hill Reporter

A group of over 35 organizations is pushing back against the Obama administration’s pressure for cuts to Medicare Advantage, the private-sector part of Medicare.

The Centers for Medicare and Medicaid (CMS) announced Monday, just days after the comment period was over, it would be slashing payments by 2.5 percent in 2017 for the increasingly popular program. This move could potentially decrease payments for around 3.3 million seniors covered under Employer Group Waiver Plans.

The Coalition to Save Medicare Advantage Retiree Coverage – whose members include the U.S. Chamber of Commerce, UnitedHealth Group, the Association for Behavioral Health and Wellness and Verizon – fear the move will lead to less options in terms of providers, an increase in costs for low-income beneficiaries and decreased coverage.

“The quick expansion reflects a broad drive to save Medicare Advantage Retiree Coverage from CMS’ proposed 3-to-4 percent cuts, which will cost each senior retiree enrolled in this coverage up to $264 a year in higher costs and reduced benefits,” the group wrote in a statement. “We have united to ensure retirees are able to maintain the level of healthcare benefits they worked years to earn.”

CMS’s proposed changes includes a waiver that would eliminate the bidding process for federal government funding for the employer group market segment.

The annual reduction would be approximately $750 million to $870 million, according to a study conducted by Milliman, a nonpartisan consulting firm, and commissioned by the Chamber of Commerce.

“This type of coverage gives seniors more comprehensive access to benefits than traditional Medicare and provides greater care coordination and management efforts to improve their health, so we are very concerned the change in the bidding process will not only result in a reduction in funding, but will also undermine the ability of these programs to meaningfully provide good disease management these seniors have come to enjoy,” Katie Mahoney, the executive director of health policy for the U.S. Chamber, told The Daily Caller News Foundation. 

The group is urging supporters to reach out to members of Congress in an attempt to keep the changes from being made permanent.

Lawmakers on both sides of the political spectrum wrote a letter to the agency questioning whether CMS has properly investigated the impact it will have on seniors.

“We are concerned that the proposed changes to the methodology may harm employers’ ability to provide retiree benefits through a consolidated health plan encompassing both Medicare benefits and supplemental retiree offerings,” top members of the House Ways and Means Committee wrote.

The final notice is expected to be release April 4.

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