Obama Administration Erases Medicare Advantage Cuts

Monday, 07 Apr 2014 08:29 PM

By Jason Devaney

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Planned cuts to the Medicare Advantage program have been erased by the Obama administration after Democrats in Congress voiced their opposition to the idea.

The proposal would have slashed government payments to insurance companies by 1.9 percent, which was expected to lead to either increased costs at the consumer level or cuts to the program. It was part of the Affordable Care Act, which was slated to cut $200 billion from Medicare Advantage over a 10-year period.

But in an about-face, the government will pay insurance companies .40 percent more starting next year, according to The Hill.

"The policies announced today will provide improved benefits in Medicare Advantage and the Prescription Drug Plans while keeping costs low for Medicare beneficiaries," Centers for Medicaid and Medicare Services administrator Jonathan Blum said in The Hill story. "We believe that plans will continue their strong participation in the Medicare Advantage program in 2015 and beneficiaries will continue to have access to a wide array of high quality and affordable Medicare health and drug plans."

Republicans opposed the cuts all along, but Democrats recently began to join them with the November midterm elections on the horizon. The changes were originally slated to begin Monday.

"I oppose these cuts, and I have called upon the president to reverse course and protect this critical program," Democratic Rep. Ron Barber of Arizona said last week.

Several industry groups opposed the Medicare Advantage cuts, including America's Health Insurance Plans. The organization started a campaign to make the public aware of the proposal in January by putting its message on buses in Washington, D.C.

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