Congressional Dems Ask HHS To Limit 2011 MA Rate Hikes

NU Online News Service, June 7, 12:51 p.m. EDT

The battle by congressional Democrats to limit the damage from major cuts imposed through the health care reform law to the politically popular Medicare Advantage program has started.

In a letter to the Department of Health and Human Services Friday, the leaders of the House and Senate committees who wrote the law are asking that the department do what it can to protect seniors from unwarranted rate hikes and high out-of-pocket costs in the program for 2011.

"Health care reform strengthened Medicare and made Medicare Advantage more competitive, but it is critical that we don't let private insurance companies use these changes as an excuse to raise premiums or cut benefits for seniors to bolster their own bottom line," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee.

"The Affordable Care Act increases the authority vested in the secretary to hold MA (Medicare Advantage) plans accountable for their bid submissions," the letter said. "Using this authority, we expect the secretary and officials at CMS [Centers for Medicare and Medicaid Services] to ensure that the bid proposals are accurate, merit approval, and are not discriminatory in benefit design or relative to plan payments."

Under the new law, federal payments to the Medicare Advantage plans would be cut by about $136 billion over the next 10 years, according to the Congressional Budget Office.

But, an official of the Centers for Medicare and Medicaid Services said the cuts will not start until 2012 and the payment levels for the 2011 year will remain as this year.

Robert Zirkelbach, a spokesman for America's Health Insurance Plans (AHIP), said in a statement, "Washington can't slash $200 billion out of Medicare Advantage and then try to shift the blame to the health plans that administer the program when those cuts inevitably result in higher premiums and benefit reductions for seniors."

Mr. Zirkelbach added, "The CBO (Congressional Budget Office) has stated that additional benefits provided by Medicare Advantage will be cut in half and that millions of seniors will lose their current coverage."

A CMS official said the $200 billion figure cited by AHIP must include a provision for inflation for the 2012-2020 period, because the actual figure is $136 billion.

The letter by the congressional health care leadership was written in anticipation of new bids by underwriters for 2011. They are due Monday, according to the CMS official.

The letter asked HHS Secretary Kathleen Sebelius to review Medicare Advantage plan bids closely and require private insurance companies to justify any proposed changes in premiums or benefits for seniors in Medicare Advantage plans.

The leaders also asked Ms. Sebelius to use the authority given to her by the new health reform law, the Patient Protection and Affordable Care Act, to protect seniors from unwarranted rate hikes and high out-of-pocket costs.

The letter noted that the law provides HHS additional authority to protect beneficiaries from Medicare Advantage plans that offer discriminatory benefit packages.

In particular, it limits the ability of these plans to charge higher cost-sharing than fee-for-service Medicare in three specific categories and provides the secretary with authority to extend this protection to additional services as needed.

The new law also removes unwarranted overpayments that have caused Medicare Advantage to cost more than Medicare fee-for-service; shortened the solvency of the Medicare trust fund; and led to higher premiums for the more than three-quarters of beneficiaries in traditional Medicare, the letter said.

In phasing out these overpayments, CMS must ensure that plans work to trim administrative costs and other overhead, rather than merely shifting additional costs onto beneficiaries to preserve their bottom line, the letter stated.