As Cuts to Medicare Advantage Plans Loom, AHIP Steps up

Tuesday, 14 Jan 2014 10:11 PM

By Amy Woods

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The insurance industry has launched an anticipatory advertising offensive against the Obama administration, which it believes will threaten to cut private Medicare plans, such as Medicare Advantage, this year, Politico reported.

With a "Seniors Are Watching" theme, the group America's Health Insurance Plans will ramp up the new ad blitz next week with a rollout on buses in the Washington area. The blitz is aimed primarily at the Centers for Medicare & Medicaid Services, which last year proposed at 2.3-percent cut in funding to the plans. AHIP conducted a similar ad campaign to oppose it, and it worked; the plans saw a 3.3-percent increase.

This year's ads tout that there are 1.5 million seniors in the country who are "ready to defend the Medicare Advantage coverage they like and want to keep," Politico reported.

Every year in February, the Centers for Medicare & Medicaid Services notifies of its proposed rates for the plans, effective the following year. Whether a repeat of the ad blitz will positively impact the outcome for seniors remains to be seen.

Medicare Advantage is facing reductions in payments and fees because of the implementation of the Affordable Care Act. It also faces cuts from sequestration.

"This is just setting the stage so that when the 2015 announcement comes out, AHIP will try to argue that these are new cuts," said Edwin Park, of the Center on Budget and Policy Priorities. "But there are no new cuts."

An estimated 14 million seniors are enrolled in the private plans.

"If CMS doesn't keep Medicare Advantage payment rates flat next year, it is going to create a huge political problem for members of Congress this Fall when they have to face millions of angry seniors who just found out they are losing benefits and choices they were promised they could keep," an insurance-industry source said.

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