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Cuts by Affordable Care Act in Medicare Payments to Advantage Plans Did No Harm

Medicare Rights Center releases report: doomsayers wrong saying a reduction in plan payments would increase costs, decrease benefits, diminish plan choices

June 28, 2012 – One of the tactics used by opponents of the Affordable Care Act was to tell senior citizens that it made “cuts” in the Medicare program. Details were usually left vague but the implication was it reduced benefits. That was never the case, according to a report released yesterday by the Medicare Rights Center. It shows that even when the cuts were accurately described as reductions in money Medicare paid insurance companies to promote Advantage plans, the action had no negative impact on Medicare patients.

The Medicare Rights Center report is about the effects of measures in the Patient Protection and Affordable Care Act (ACA) to reduce federal reimbursements to private health insurance plans that provide Medicare benefits through the Medicare Advantage (MA) program in New York, where the organization is headquartered.


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The report contradicts predictions that a reduction in payments to MA plans under the ACA would cause insurers to exit the market, decrease plan benefits or immediately pass costs to Medicare beneficiaries, according to the Center.

The report, New York’s Medicare Marketplace: Examining New York’s Medicare Advantage Plan Landscape in Light of Payment Reform, analyzes the 2011 and 2012 MA plan landscape in New York State.

It examines changes in plan enrollment, benefit offerings or costs before and after the implementation of ACA cost saving measures. These measures address overpayments to MA plans by moving plan payment amounts closer to the average costs of Original Medicare by county.

“The doomsayers were wrong when they said that a reduction in plan payments would increase costs, decrease benefits and diminish plan choices in the MA market," said Doug Goggin-Callahan, Director of Education and New York State Policy at the Medicare Rights Center.

"In fact, in New York, plan availability and affordability has remained relatively unchanged and has improved in some areas, according to our survey.”

“The experience we document in New York is roughly similar to what has happened in the MA market nationwide, and it is reassuring that the overall MA plan landscape in 2012 appears to be as robust as it was in 2011,” said Joe Baker, President of the Medicare Rights Center.

“However, as changes in reimbursements to MA plans move forward, we must continue to monitor plan benefits and make certain that insurers’ efforts to control costs and maintain their bottom lines do not fall on the backs of beneficiaries.”

The report was made possible by funding from the United Hospital Fund.

Read the report at:’s-Medicare-Marketplace.pdf


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