Medicare fight looms over midterms

Health insurers are arming themselves for an aggressive campaign to beat back cuts to Medicare Advantage.


Insurers are hoping that their seven-figure lobbying and advertising effort, coupled with pressure from key business interests, will convince the administration to abandon cuts that officials are expected to announce on Feb. 21.

"Seniors cannot afford another round of rate cuts to their Medicare Advantage coverage," said America's Health Insurance Plans (AHIP) President Karen Ignagni in a statement this week. "[Medicare] should protect seniors in the program by maintaining current payment levels next year."

The argument highlights uncertainty surrounding Medicare Advantage, an increasingly popular alternative to traditional government health insurance that covers roughly one-quarter of the beneficiaries in the entitlement program.

On average, the government pays more per Medicare Advantage patient than it does for beneficiaries in traditional Medicare. Democrats have sought to rectify the imbalance by cutting reimbursements to the private plans, an approach Republicans strongly oppose.

One major insurer cited cost pressure when it eliminated a large number of doctors from its Medicare Advantage networks.

The industry and its GOP allies blamed the decision on ObamaCare, which cuts Medicare Advantage by $200 billion over 10 years.

But many healthcare experts said insurers were overstating their case in order to avoid further rate reductions.

"Changes may be in store down the line, but thus far, it doesn't appear that the payment changes have had a major impact on the program," said Tricia Neuman, a Medicare expert and senior vice president with the Kaiser Family Foundation.

The Kaiser foundation has published research showing that enrollments, premiums and plan choices under Medicare Advantage have remained in good shape despite cuts to the program.

The debate is likely to heat up as the Centers for Medicare and Medicaid Services (CMS) prepares to announce the 2015 Medicare Advantage rates on Feb. 21.

AHIP intensified its lobbying against the cuts this week by promoting letters from the powerful Chamber of Commerce, the National Association of Manufacturers and the Care Continuum Alliance, a fellow trade group.

AHIP also said that Medicare Advantage patients experienced cost increases and benefit cuts of $30-$70 per month as a result of last year's 6 percent cut to the program.

The conclusion came from an independent analysis released Thursday by consulting firm Oliver Wyman.

The statements were made on top of a media blitz designed to place pressure on the administration.

One television advertisement released last month saved its political gut-check for the end. "You know, we vote," said one elderly woman who is identified as a Medicare Advantage patient.

The charge underscore the political overtones of the debate, and echoes a heated controversy from the 2012 elections, when GOP presidential nominee Mitt Romney accused Obama of "gutting" Medicare with healthcare reform.

The administration points to signs like slow premium growth and increasing enrollments to argue that Medicare Advantage is better off under the 2010 law.

A cut to Medicare Advantage could come back to haunt Democrats just a week before a midterm election that is likely to feature heavier turnout among older voters.

If the administration imposes further cuts, and the Medicare plans respond by raising premiums, seniors would be hit with higher prices just weeks before the November election.

The GOP appears to be sharpening its attack lines against Democrats on the Medicare issue.

This week in Florida, Republican House candidate David Jolly slammed Democrat Alex Sink for ObamaCare's cuts to the program. The two are competing in a special election to replace the late Rep. Bill Young (R).

Then, on Friday, conservative advocacy group American Action Network released a survey highlighting opposition to candidates who support additional cuts.

The issue will not "fly under the radar ... for much longer," the group promised in a statement.