Obama proposes cut to Medicare Advantage

Tuesday, February 25, 2014

WASHINGTON – The Obama administration has proposed cutting reimbursements rates for Medicare Advantage (MA) plans by 1.9% in 2015, Kaiser Health News reports. Insurers argue, however, that the cut is much bigger when you combine it with new fees on health plans related to healthcare reform, a phase-out of the “star rating” system that helped buffer cuts from previous years and additional cuts due to sequestration, according to the news organization. Last year, CMS proposed a 2.3% rate cut for 2014, but after heavy lobbying, the agency ended up increasing rates by 3.3%. Enrollment in Medicare Advantage plans rose in 2014 by 8.9% to 15.9 million enrollees, according to consulting firm Avalere Health.