Administration Fails To Deliver Expected Increase On Medicare Advantage Plans

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Juliegrace Brufke Capitol Hill Reporter
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The Centers for Medicare and Medicaid announced Monday evening health insurers providing Medicare Advantage plans, the private-sector part of Medicare, will see their payments increase by .85 percent in 2017 – less than the 1.35 percent proposed earlier this year. 

Puerto Rico will receive a slightly higher bump, taking in an extra 1.25 percent due to the grim state of its economy. The agency said it believes the changes will lead to a 2.2 revenue increase, which also falls short of its February projections.

The proposed rule faced resistance from insurers, businesses and GOP lawmakers due to its potential threat to the health care plans of 3 million seniors due the estimated 2.5 percent cut.

The final 250-page regulation will still change the compensation policy for Medicare employer retiree plans – which are expected to see a major slump in revenue due to the rule by 2018 – but the shift will take place over the course of two years instead of this summer following concerns made during the public comment period.

Gradually, the bidding process used for Employer Group Waiver Plans will be phased out, instead they “will compete for employer contracts for these offerings based on access, quality, customer service, and wrap-around benefits.”

“The two-year transition mitigates the effect of what CMS had estimated would be a negative 2.5 percent cut to the Employer Group Waiver Plans,” Sean Cavanaugh, CMS’ deputy administrator, said in a press call according to The Morning Consult reports. “We would expect to see only half of that effect next year.”

GOP lawmakers slammed the final rule, saying the agency’s move will have a detrimental effect on senior’s health care.

“Yet again, CMS failed to address many of the policy recommendations we made on behalf of MA beneficiaries, including our calls to abandon changes to the Employer Group Waiver Plans and changes that will negatively impact low-income seniors,” House Ways and Means Chairman Kevin Brady and Health Subcommittee Chairman Pat Tiberi said in a joint statement. “The agency’s dismissal of our concerns — the concerns of our seniors, doctors, and health care providers — will only disrupt the quality, affordable health care choices millions of seniors enjoy today.”

Senate Finance Committee Chairman Orrin Hatch said Republicans will continue to fight for seniors access to the popular plans.

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