Fight over Medicare Advantage flares up

Health insurance plans pushed back Friday against lawmakers who want to prevent them from raising premiums or cutting benefits in Medicare Advantage plans. The industry says such adjustments are inevitable given that the health reform law cuts payments to the program by more than $130 billion over 10 years.

"Washington can't slash ... Medicare Advantage and then try to shift the blame to the health plans that administer the program when those cuts inevitably result in higher premiums and benefit reductions for seniors," Robert Zirkelbach, spokesman for America's Health Insurance Plans, said in a statement.

The statement comes in response to a letter House and Senate Democrats sent to Health and Human Services Secretary Kathleen Sebelius on Thursday asking her to thoroughly review Medicare Advantage bid submissions for 2011. The deadline for the bids is Monday, June 7.

The Medicare Advantage program allows about 11 million seniors to get their Medicare benefits through private plans, but Democrats have for years tried to rein in the program because it costs more per beneficiary than the traditional Medicare benefit known as fee-for-service.

The health reform law "removes unwarranted overpayments that have caused Medicare Advantage to cost more than Medicare fee-for-service, shortened the solvency of the Medicare trust fund, and led to higher premiums for the more than three-quarters of beneficiaries in traditional Medicare," the letter states. "In phasing out these overpayments, (the Centers for Medicare and Medicaid Services) must ensure that plans work to trim administrative costs and other overhead, rather than merely shifting additional costs onto beneficiaries to preserve their bottom line."

The letter to Sebelius was signed by senators Max Baucus (Mont.) and Jay Rockefeller (W.Va.), respectively chair of the Finance panel and its health subcommittee, and by Reps. Henry Waxman (Calif.), Sander Levin (Mich.), Frank Pallone (N.J.) and Pete Stark (Calif.), the chairmen of the Energy and Commerce and Ways and Means panels and their health subcommittees.