Medicare Advantage Not Out of the Woods

I recently reported on the flip-flop the Center for Medicare and Medicaid Services made on the Medicare Advantage plans. Initially the CMS said it would substantially reduce reimbursement rates for Medicare Advantage providers. After public protests, CMS reversed policy. But that doesn’t mean the Medicare Advantage plans are out of danger. President Obama and most of his party don’t like the private sector’s role in medical care that is the heart of Medicare Advantage.

So, according to this report, the plan is to slowly reduce coverage for Advantage plans and let the program slowly die. People will stop choosing the plans, because they will be less attractive. They’ll have higher costs and lower benefits.

That’s a shame, because Medicare Advantage plans are very good for beneficiaries and for the country. They provide better care at lower cost than traditional Medicare does.

To justify gutting the program, critics point out that the average MA plan costs about 10 percent more than conventional fee-for-service Medicare, according to the Congressional Budget Office.

But MA plans offer beneficiaries additional benefits or premium rebates that amount to 13 percent of traditional Medicare’s costs. In other words, Medicare Advantage patients are getting 3 percent of additional benefits — things like preventive care, vision, dental, and chronic disease management — for free.

Not surprisingly, those additional benefits lead to much better health outcomes for the MA population compared to those with traditional fee-for service Medicare. MA’s beneficiaries score better on a number of key quality indicators, including screening for breast cancer, diabetes and lipid testing, flu vaccines, and beta-blocker prescriptions following heart attacks.

Further, contrary to the Obama Administration’s claims, the program actually saves taxpayers money.