The feds are at it again. Medicare is in the cross hairs with an anticipated 0.9 percent cut to Medicare Advantage plan payments in 2016. The final decision is to be made on April 6 of this year.
Medicare Advantage plans are an alternative to traditional Medicare. Traditional Medicare consists of Part A (hospital) and Part B (medical) coverage. Medicare Advantage plans (Part C) can be chosen in place of the traditional Medicare option, for a price. That price is a monthly premium. The added cost is enticing to many seniors who need eyeglasses, hearing aids, dentures, and other services not covered by traditional Medicare. So enticing, in fact, that nearly 16 million Americans signed up for Medicare Advantage plans in 2014.
It is not hard to see why the government wants to cut back on expenses. They pay more per patient for Medicare Advantage than on traditional Medicare. That extra money goes not to the hospitals or doctors who care for patients, however, but to the insurance companies that sponsor these plans.
With the increasing number of baby boomers reaching Medicare eligibility age, Medicare Advantage has been a profit making venture for insurance companies. Now the government is threatening to cut payments to those insurance companies by 0.9 percent. That may not sound like much but multiply that by millions and the dollars quickly add up. How will the insurance companies respond when they are faced with a cut to their profit margin?
Medicare Advantage plans could decrease the number of services offered. If the intended goal is to offer more services than traditional Medicare, cutting services defeats the purpose of a Medicare Advantage plan. Seniors in the end lose out on necessary coverage.
Medicare Advantage plan premiums could increase. If Medicare Advantage plans become more expensive, fewer seniors will be able to afford the benefit at all. This will leave many seniors without the full breadth of services they need.
Medicare Advantage plans could decrease payments to physicians and health care providers. This could lead to fewer health care providers wanting to participate in Medicare Advantage. It hardly matters if seniors have expanded health care coverage if they cannot find somewhere to use it.
No matter what happens, Medicare beneficiaries are surely the ones who will pay if the cuts go into effect. With decreased breadth of Medicare Advantage plans, some seniors will be left with higher out-of-pocket expenses for uncovered tests and treatments, tests that they need. Some seniors are already so strapped for cash they have to choose between paying for their mortgage or paying for health care. It isn’t fair, not while insurance companies pocket a few bucks at their expense.
How do we solve this coverage problem? The answers are not easy in a capitalist society. The government wants to eliminate their deficit, and money waits to be made by for-profit companies. Perhaps the government could find other areas to cut services or better yet dictate that insurance companies not decrease their Medicare Advantage coverage options if they are to receive federal dollars at all. The risk is that could lead to insurance companies dropping out of Medicare Advantage altogether.
As we age, our medical needs increase. Seniors need access to care that will address those needs. They need quality care at a reasonable cost. Each swipe at Medicare makes it harder for American seniors to get by. I can only imagine what the government has planned next.
Tanya Feke is founder, Diagnosis Life.