AHIP study: Medicare Advantage cuts will drive up premiums

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That would translate into benefit cuts or premium increases worth $50 to $90 per month for each senior who uses Medicare Advantage, according to Oliver Wyman.

“The impact of these cuts is real; it’s not speculative,” AHIP President and CEO Karen Ignagni told reporters Tuesday.

The federal Medicare agency recently said it plans to cut Medicare Advantage payments by 2.3 percent next year — on top of significant cuts included in President Obama’s healthcare law.

All told, Medicare Advantage plans would be absorbing a total cut of 6.9 to 7.8 percent, according to Oliver Wyman’s report, and those cuts would translate into benefit cuts or premium increases for seniors. 

It’s hard to predict how plans would balance those options, but they would have to cut benefits or raise seniors’ costs by $50 to $90 per month to make up the difference.

Ignagni said previous rounds of payment cuts have driven seniors out of the Medicare Advantage program. Allowing the 2.3 percent cut to go through would have serious effects on seniors, potentially including lower enrollment, she said.

 “We’ll see it in benefits, we’ll see it in costs that beneficiaries have to pay, and we’re very concerned … that we’ll see it in disruption,” she said.