April 10, 2015
CMS Reverses Course on Medicare Advantage Cuts
In an April 6 press release, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) announced that Medicare Advantage (MA) rates would increase by 1.25 percent, avoiding a rate cut that had been predicted by the agency and that the Council (and other employer groups) had argued would be harmful to seniors and employer health plan sponsors.
In a February 20 advance notice of methodological changes, CMS had proposed a 0.9 percent cut in the 2016 payment rates for the MA program, in addition to the MA cuts in President Obama’s Fiscal Year 2016 federal budget proposal, which included $43.4 billion in MA-related cuts over the next decade. Nearly $7.2 billion of the cuts would affect MA Employer Group Waiver Plans (MA-EGWP plans). These cuts would have been in addition to the provisions in the Patient Protection and Affordable Care Act (PPACA) that are expected to reduce MA funding by $200 billion by 2019. The April 6 announcement indicates that the forthcoming MA Payment Guide will instead increase MA payment rates by 1.25 percent in 2016.
The initially predicted cuts posed significant concerns for retiree health plan sponsors, insurers, and beneficiaries. The Council joined other employer groups in a February 18 letter to CMS that stated these cuts would cause employers to face “significant challenges in building long-term strategies for effective retiree coverage .... Not only do MA cuts hurt millions of seniors through reduced benefits, narrower networks, and higher out-of-pocket costs, but employers who want to sustain group-sponsored Medicare retiree coverage are simultaneously pressured by rising health costs” (see the February 19 Benefits Byte).
The Council joined a similar group letter urging against further MA cuts in March 2014 and also filed its own letter expressing similar concerns in February 2014 (see the March 10, 2014, Benefits Byte for more information). For more information, contact Kathryn Wilber, senior counsel, health policy at (202) 289-6700.
A Bit About Your Benefits: Associate Membership
The Council is honored to have nearly 400 corporate member organizations who, collectively, have extended “associate membership” to 6,800 benefits professionals within their organizations.
This Benefits Byte is just one example of the services we provide. All Council benefits for associate members are included, without additional cost, under a corporate member’s annual dues investment.
If you have a colleague at your company who is not currently receiving Council materials and would like to be included under your company’s membership, they can sign up here. Our staff will reply back with a welcome e-mail confirming their associate membership.
Should you depart your employer for another organization, your associate membership does not transfer. However, we encourage you to join through your new employer. A full list of Council members is available and information about corporate memberships can be obtained by clicking here.