Medicare reversed payment cuts, and not many are happy about it

Medicare’s recent reversal of a proposed payment cut to private health plans – the second such reversal in two years – hasn’t won a lot of rave reviews.

Insurance analysts say they still anticipate lower payments to private Medicare Advantage plans in 2015. Some editorial pages and supporters have criticized the Obama administration and lawmakers for easing off on Medicare Advantage cuts ordered by the president’s health-care law.

The Affordable Care Act calls for cuts to the Medicare Advantage program, which critics say subsidizes private insurers to cover Medicare beneficiaries at a higher cost to taxpayers. But the politics of cutting Medicare are no doubt getting in the way.

As a quick refresher: Last Monday, the Obama administration turned a proposed 1.9 percent cut to 2015 Medicare Advantage health plans into a .4 percent increase after heavy lobbying from insurers and the Hill. It was the second-straight year that the Medicare agency transformed a proposed rate cut into a raise.

Despite last year’s reversal on the proposed rate cut, insurers say they still saw their Medicare Advantage reimbursements shrink about 6 percent in 2014 plans. And today, Moody’s Investor Service said even after last week’s payment boost, the final 2015 rates are a “credit negative” for Medicare Advantage insurers, who are anticipating an average reimbursement reduction between 3 percent to 4.5 percent next year.

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The Washington Post | By Jason Millman


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