HHS scraps proposed cuts to private Medicare plans

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The Medicare agency had initially proposed a 2.2 percent cut in Medicare Advantage payments. But on Monday the agency said it had scrapped that cut and would instead offer a 3 percent payment increase next year.

America's Health Insurance Plans (AHIP), the industry's top lobbying group, praised the reversal.

“By being responsive to the more than 160 members of Congress from both parties who raised concerns about the impact of the proposed payment rate on seniors, (the Medicare agency) has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges," AHIP President and CEO Karen Ignagni said in a statement.

Dozens of lawmakers had pressed the Medicare agency to change the underlying assumptions in its proposed cut. 

The agency had assumed that separate cuts to doctors' Medicare payments would take effect, but lawmakers urged the planners to assume Congress would block those cuts, as it always does.

The agency accepted that change before finalizing its payment policies Monday.

“While this action alone isn’t a silver bullet to guarantee the sustainability of the Medicare Advantage program, it does reflect the strong bipartisan support for preventing such devastating cuts from occurring," Sen. Orrin Hatch (R-Utah) said in a statement.


— This post was updated at 5:29 p.m.