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Senior Citizen Politics
Payment Cuts for All Medicare Advantage Plans Would
Save $54 Billion
Savings for years 2009 to 2012 by Congressional
Budget Office
June 29, 2007 -
Congressional Budget Office Director Peter Orszag on Thursday at a
House Budget Committee hearing said that a reduction of
reimbursements to private fee-for-service plans in Medicare Advantage
would not result in large savings,
CQ HealthBeat reports.
According to the
Medicare Payment Advisory Commission, reimbursements for MA plans --
which cover extra benefits, such as vision and hearing tests and
treatments -- are 12% higher than payments for the traditional program
for equivalent benefits, and reimbursements for private fee-for-service
plans are 19% higher.
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Politics for Senior Citizens |
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Some Democratic lawmakers seek to reduce
reimbursements for MA plans "as a way to fund other health care
priorities, such as expanded coverage of uninsured children through
reauthorization of" SCHIP, CQ HealthBeat reports.
At the hearing, Orszag said that equalization of
reimbursements for private fee-for-service plans and traditional
Medicare would save $14 billion from 2009 to 2012 and $43 billion from
2009 to 2017. Equalization of reimbursements for all MA plans and
traditional Medicare would save $54 billion from 2009 to 2012 and $9.5
billion in 2009 alone, Orszag said.
Other Issues
Rep. Jim Cooper (D-Tenn.) asked about the effect of
a proposal that would end the ability of private fee-for-service plans
to "deem" physicians contracted when they agree to treat one Medicare
beneficiary enrolled in the plans. Some critics have said that
beneficiaries enrolled in the private fee-for-service plans who receive
treatment from "deemed" physicians pay higher copayments.
 Orszag said that such a proposal would require
private fee-for-service plans to establish their own physician networks,
and former
CMS Administrator Mark McClellan said that "long-term use of deeming
authority may not be necessary for a well-run (private fee-for-service)
plan." Witnesses also discussed out-of-pocket costs for Medicare
beneficiaries enrolled in MA plans.
Tricia Neuman, vice president of the
Kaiser Family Foundation and director of its
Medicare Policy Project, said Medicare beneficiaries enrolled in MA
plans have higher copays for some services, such as daily copays for
hospital stays and home health visits not required by the traditional
program. She said additional benefits and lower cost-sharing in Medicare
Advantage plans may be attractive to some beneficiaries, "but
beneficiaries are not always better off financially in Medicare
Advantage plans than in traditional Medicare" (Carey, CQ HealthBeat,
6/28).
In related news, House Ways and Means
Health Subcommittee Chair Pete Stark (D-Calif.) on Thursday
introduced a bill under which MA plans could not charge beneficiaries
more than traditional Medicare for services (Edney, CongressDaily,
6/28).
>>The CBO testimony on Medicare Advantage plans is
available
online. A related report from CBO is available
online. Note: You must have Adobe Acrobat Reader to view the related
report.
>>Testimony from all participants is available
below. Note: You must have Adobe Acrobat Reader to view the testimony.
Testimony:
Medicare Advantage and the Federal Budget
Click on the name of the participant to
read their testimony
Panel One
Dr. Peter R. Orszag
Director
Congressional Budget Office
Dr. Mark E. Miller
Executive Director
Medicare Payment Advisory Commission
Panel Two
Mark McClellan, M.D., Ph.D.
Visiting Senior Fellow
AEI-Brookings Joint Center for Regulatory Studies
Associate Professor of Economics and of Medicine
Stanford University
The Honorable Barbara B. Kennelly
President and Chief Executive Officer
National Committee to Preserve Social Security and Medicare
Patricia Neuman, Sc.D.
Vice President
Director, Medicare Policy Project
Henry J. Kaiser Family Foundation
Robert M. Wah, MD
Member, Board of Trustees
American Medical Association
Catherine Schmitt
Vice President, Federal Programs
Blue Cross Blue Shield of Michigan
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