Private insurers that offer Medicare Advantage plans will receive a nearly 1 percent raise from the federal government next year, the Obama administration announced Monday.
The Centers for Medicare and Medicaid Services said participating plans will receive a 0.85 percent hike in reimbursements in 2017, down from the 1.35 percent increase it proposed in February, based on revised estimates of how much medical services will cost.
The announcement caps an intense lobbying campaign by insurers and some in Congress, who urged the administration not to shortchange the popular alternative to the government health care program for seniors.
Medicare Advantage plans received a 1.25 percent raise for 2016 after the administration reconsidered a proposed cut.
Nearly 17 million people, nearly a third of all Medicare recipients, are enrolled in the plans run by insurance behemoths like Humana, Aetna and UnitedHealth Group, while the rest rely on the government’s fee-for-service model to reimburse doctors.
The Centers for Medicare and Medicaid Services noted that individual plans may receive even higher reimbursements through bonus payouts for improving the quality of care they provide to beneficiaries.
“With these policies, we will continue to see improvements in growth, affordability, benefits and quality for millions of seniors and people living with disabilities,” acting CMS Administrator Andy Slavitt said.
The administration said it will phase in a contentious change to how it reimburses certain employer-linked plans for retirees over the next two years.
America’s Health Insurance Plans, the industry’s main lobby, said its efforts and outreach by members of Congress forced the Centers for Medicare and Medicaid Services to “mitigate the negative impact” of some of its proposed changes to the program.
“Yet, more can be done to ensure stability for more than 3 million seniors who depend on Medicare employer retiree plans,” said Marilyn Tavenner, president and CEO of America’s Health Insurance Plans. “We urge policymakers to focus on policies that will strengthen the Medicare Advantage program moving forward and ensure high-quality, affordable coverage for seniors and vulnerable beneficiaries.”
For years, America’s Health Insurance Plans has contended that any cuts to payments would cause a trickle-down effect that increases premium costs and reduces provider options for seniors, a particularly sensitive issue in a pivotal election year.
The group pointed to the rising number of congressional lawmakers who called on the administration to resist cuts — 287 House and Senate members in 2014 compared with 404 in 2016, a 41 percent increase.
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Calls to protect Medicare Advantage grew stronger after the passage of the Affordable Care Act, with Republicans saying President Obama “robbed” hundreds of billions of dollars from the program to pay for the rest of his signature health care law.
Congressional Democrats said the administration merely scaled back payments to private insurers that administer the plans so they were in line with what traditional Medicare pays.
Sean Cavanaugh, a deputy CMS administrator, said Monday that Medicare Advantage has grown “stronger and more popular” every year since enactment of the Affordable Care Act in 2010. Enrollment has grown by 50 percent since the law was enacted, and premiums have dropped by 10 percent from 2010 to 2016.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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