WASHINGTON – The Obama administration has abandoned its proposed 2015 cuts in the Medicare Advantage program that serves more than half of Western New York seniors, and local insurers are breathing a sigh of relief as a result.
“This is really good news for seniors,” Robert Tracy, senior business director for government products at Independent Health, said Tuesday. “Medicare Advantage is still going to be a good value.”
The administration’s reversal means it is likely that Independent Health’s Medicare Advantage plans won’t change much in terms of cost or services provided next year, Tracy said.
Other local insurers said it is too soon to know for sure what the exact impact of the changes will be on rates or services, but they agreed that the government’s change is a good one.
“Generally, it’s better than where we were 45 days ago,” when the federal Centers for Medicare and Medicaid Services first proposed cutting payments to insurers for the Medicare Advantage plans by an average of about 2 percent, said Michael Burke, senior vice president for government programs at Univera Healthcare.
Under the revised proposal, insurers on average will get a 0.4 percent increase in their reimbursements, though payments will vary widely based on the insurer and the region they serve.
Independent Health, for example, said it may even get a higher reimbursement increase than 0.4 percent, while Univera – which serves a wider service area – is still expecting a cut.
The Obama administration’s reversal on the rate cut comes after a loud outcry from members of Congress and the insurance industry.
In announcing the change, the Centers for Medicare and Medicaid Services said it made the move “after careful consideration of public comments.”
“The policies announced today will provide improved benefits in Medicare Advantage and the prescription drug plans while keeping costs low for Medicare beneficiaries,” said Jonathan Blum, principal deputy administrator for the government agency. “We believe that plans will continue their strong participation in the Medicare Advantage program in 2015, and beneficiaries will continue to have access to a wide array of high-quality and affordable Medicare health and drug plans.”
While Independent Health voiced confidence that the changes will mean stability for seniors on its HMO-like Medicare Advantage plans, executives at Univera and BlueCross BlueShield of Western New York were more circumspect.
Burke said Univera was in the early phase of analyzing the local impact of the decision, meaning a more complete review could reveal that Univera, like Independent Health, will get a boost in funding for its Medicare Advantage plans in Western New York.
“If there is a revenue increase, and if it’s enough to cover the trend costs, we will try to keep the plans as close as we can to where they are now,” Burke said.
Meanwhile, Donald R. Ingalls Jr., vice president for state and federal relations at BlueCross BlueShield of Western New York, said his company also is just in the beginning phase of interpreting the new federal rates for 2015.
“The changes CMS implemented in its final rate notice will help mitigate the impact on seniors,” he said. “But Medicare Advantage is still facing a cut in payment rates.”
That’s because of previous cuts included in the Affordable Care Act. Those cuts to Medicare Advantage have been one of the many hot-button issues in Obamacare, with Republicans accusing the Obama administration of attacking the successful program for seniors to fund the Affordable Care Act’s array of new programs and requirements.
Republicans portrayed the administration’s reversal on the latest Medicare Advantage cuts as nothing but a campaign gambit by the president in an election year when control of the U.S. Senate is up for grabs.
“This was a political move, and to the extent that it’s going to help our seniors for a year, that’s good,” said Rep. Chris Collins, R-Clarence. “But they need to know that this is a delay in the implementation, and it’s just his way of trying to sneak past another election.”
Democrats who fought the proposed cuts alongside Republicans saw the situation very differently.
“Medicare has already shouldered its share of cuts, and this new cut would have been disproportionate, hurting seniors who would lose their plans or pay more,” said Sen. Charles E. Schumer, D-N.Y. “We’re glad the administration heeded our call and reversed the policy, which will give over a million New York seniors who use Medicare Advantage the peace of mind of knowing that their health care plan will still be affordable.”