Cuts to Medicare Advantage a Bad Idea for Manufacturers

By March 6, 2014Health Care

Today, the NAM expressed our strong concerns to the Centers for Medicare and Medicaid Services (CMS) about their recent announcement of changes to the reimbursement rates for health plans under the Medicare Advantage (MA) program.  Many employers sponsor MA plans as a way to ease the transition from active employment to retirement, and disruptions to the program will jeopardize access to this option. The MA program has absorbed significant cuts to reimbursement rates over the last two years, and CMS’ announcement of further reductions is compounding damage already inflicted on the program.

If implemented as proposed, MA rates will have declined by nearly 11 percent in the last two years. Over 2.5 million retirees count on MA plans sponsored by their employer or union. The majority of the cuts will be passed on to beneficiaries in the form of higher premiums, lower benefits and fewer healthcare options. Estimates indicate premiums could rise by an average of $420 to $900 on top of added cost sharing of $1,750. Millions of seniors and disabled could be priced out of plans they have come to know and depend on.

The final rate letter is due on April 7 and it is our hope that CMS will reconsider and withdraw the proposed cuts and keep the levels flat for the coming year. We need to stop undermining successful programs and begin considering how this will affect manufacturers and beneficiaries.

Leave a Reply