Senate Democrats are mounting a surprisingly strong defense of Medicare Advantage, a private insurance option that their party used to deride as a wasteful giveaway to insurance companies.
Nineteen Senate Democrats this week signed a letter to the Centers for Medicare and Medicaid Services (CMS) warning of dire consequences for seniors if cuts to Medicare Advantage (MA) go through as expected later this month.
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Liberals have historically lampooned the alternative to government health insurance as receiving outsized federal support in comparison to Medicare. In keeping with this, the Democratic-led Congress that passed the healthcare reform law partially paid for it by enacting $200 billion in cuts to Medicare Advantage over 10 years.
But this week, the 19 Senate Democrats joined 21 Republicans in a letter to the CMS warning against cuts to the program.
The letter came just days before the administration is expected to propose the 2015 rates for the program. The CMS will make the announcement on Friday, which begins a 45-day finalization period.
The insurance industry trumpeted the Senate letter as evidence that there is political support to maintain funding for the program.
However, interviews with congressional staffers, think tanks and insurance industry representatives expose a split between the goals of the parties involved.
The insurance lobby is fighting to keep the 2015 Medicare Advantage rates at 2014 levels, and is interpreting the Senate letter as advocating just that.
“The ask is to keep rates flat,” Robert Zirkelbach, a spokesman for the industry group America's Health Insurance Plans, told The Hill.
Zirkelbach said the program was cut 6 percent in 2014, and another similar reduction in 2015 would lead to higher out-of-pocket costs and a reduction in benefits for seniors — changes that he said would be “devastating.”
But the senators endorsing the letter say their message is more nuanced.
They're fully expecting some reduction in the rates next year, in accordance with the Affordable Care Act (ACA), but they want assurances that those cuts will be implemented in such a way that they won't harm beneficiaries.
“We are not advocating that CMS keep the 2014 rates, but merely that the 2015 rates, accounting for the ACA cuts, allow for continued access for beneficiaries to the MA program,” a Senate Democratic aide said.
Sen. Mike CrapoMichael (Mike) Dean CrapoDemocrats narrow scope of IRS proposal amid GOP attacks Senate GOP signals they'll help bail out Biden's Fed chair Yellen confident of minimum global corporate tax passage in Congress MORE (R-Idaho), the lead Republican on the letter, is expecting some cut below this year's rate, but is urging the CMS not "to pile on with further cuts" beyond what the ACA dictates, said press spokesman Judd Deere.
The spokesman declined to say what level of cuts would be acceptable, saying Crapo is waiting to see what the CMS proposes on Friday.
The Senate letter provoked some confusion among analysts because of the timing — the CMS had likely already set the rates — and because it failed to make any specific demands. The senators asked the CMS only to “prioritize beneficiaries’ experience and minimize disruption in maintaining payment levels for 2015.”
“I’m not entirely clear [what they’re asking for] and I read the letter several times,” said Mark Steinberg of the liberal nonprofit advocacy group Families USA. “It’s tough to know what they want [to achieve with the letter], because CMS hasn’t put out their changes yet, so it’s odd to release this before the 45-day announcement.”
Insurers have mounted an intense lobbying campaign to head off expected cuts to Medicare Advantage. The issue is particularly sensitive because of the midterm elections, which has both parties courting the senior vote.
House Republican leaders have signaled they plan to make Medicare Advantage a campaign issue, and last week wrote a letter to President Obama voicing their “deep concern” over expected cuts they blamed on ObamaCare.
The Hill reached out to about a dozen House Democrats asking if they’d sign on to something similar, but they either didn’t respond or didn’t know if anything was in the works.
Created as part of George W. Bush's 2003 Medicare Modernization Act, the Medicare Advantage (MA) program offers seniors the option to get their health coverage through private insurance plans, in lieu of Medicare's government-run fee-for-service program.
Supporters argue that private insurers can provide coverage more efficiently, and the Medicare Advantage plans also offer services the traditional program does not, such as eye and dental care. Critics counter that the efficiency argument hasn't played out, noting that the taxpayer cost per beneficiary exceeds that of seniors enrolled in traditional Medicare.
Democrats have at times defended the cuts as rectifying an imbalance with traditional Medicare, and the Kaiser Family Foundation found that, in terms of enrollments, premiums and plan choices, Medicare Advantage has held up well.
According to Edwin Park of the liberal Center on Budget and Policy Priorities, enrollment in Medicare Advantage is trending upward, and has returned to pre-ObamaCare levels.
Democrats have argued that Republicans are hypocritical in their criticisms of the Medicare Advantage cuts because the same ones appear in Rep. Paul RyanPaul Davis RyanJuan Williams: Pelosi shows her power Cheney takes shot at Trump: 'I like Republican presidents who win re-election' Cheney allies flock to her defense against Trump challenge MORE’s (R-Wis.) budget.
However, at least some Democrats and Republicans are on the same page when it comes to the feeling that the CMS cut too deeply into the program this year, and say the agency has plenty of discretion not to take a lighter approach in 2015.
"The ACA changes were a small percentage of the total cuts that CMS proposed and implemented last year," the Senate Democratic aide told The Hill. "CMS has authority over a wide range of MA policies and regulations that have no connection to the ACA, and this letter is asking CMS to take a look at those and ensure continued access to MA plans for beneficiaries. We are not asking CMS to undo the ACA cuts."
Park disagreed with that assessment, arguing that Medicare spending is growing slower than previously expected, so if the CMS reduces its per-beneficiary cost assumptions, “those revisions would lower 2015 preliminary payment rates but they would not constitute any new cuts.”