Biden Administration Proposal Could Reduce Medicare Advantage Benefits By $540 Per Beneficiary in 2024, Independent Analysis Finds

WASHINGTON – The Centers for Medicare and Medicaid Services (CMS) CY 2024 Advance Notice could reduce Medicare Advantage spending by $540 per Medicare Advantage enrollee on average next year, according to an independent analysis released today by Avalere Health. With 30 million seniors and individuals with disabilities enrolled in Medicare Advantage, a vital part of Medicare, this could result in higher premiums and/or reduced benefits for these beneficiaries.

These proposals were made days before President Biden vowed to reject any cuts to Medicare during his State of the Union address to the nation.

“The Avalere analysis finds these proposed policy changes could lead to billions of dollars in new, out-of-pocket expenses for seniors and individuals with disabilities in Medicare Advantage,” said Mary Beth Donahue, president and CEO of Better Medicare Alliance. “As Medicare Advantage beneficiaries may face an average reduction of $540 per beneficiary in 2024, the reductions will have a detrimental impact on many of the 30 million beneficiaries who rely daily on the high quality, affordable care provided by Medicare Advantage. The cuts could threaten important benefits, such as transportation to medical appointments, healthy meals, vision exams, and preventative dental work. President Biden must honor his promise to protect Medicare by reversing these cuts.”

“Medicare Advantage enrollment has increased considerably in recent years,” said Tom Kornfield, senior consultant at Avalere Health. “Our analysis suggests that proposed payment changes by CMS for 2024 could result in reduced benefits or higher premiums for enrollees.”

The cuts could disproportionately impact seniors and individuals with disabilities living on a fixed income and who are unlikely able to pay higher premiums. An estimated 52% of Medicare Advantage beneficiaries live on an annual income of less than $25,000, compared to 38% of fee-for-service Medicare beneficiaries.

“Medicare Advantage plays a crucial role in expanding access to affordable, quality care among Hispanic seniors across the country,” said Dr. Elena Rios, president and CEO of the National Hispanic Medical Association, representing 50,000 Hispanic physicians in the United States. “If enacted, these policy changes to Medicare Advantage will lead to higher costs or reduced access to the vital health services that are relied upon by millions of senior beneficiaries. We urge the administration to reverse its policy and preserve access to holistic, affordable and equitable care.”

“Medicare Advantage is a lifeline for 30 million seniors and more than 676,000 Arizonans who depend on its comprehensive and coordinated care for improved health care outcomes,” said Dr. Heather Ross, government affairs officer, Arizona Nurses Association. “This new analysis shows that the administration’s proposed cut to Medicare Advantage would harm our patients and put their health at risk by increasing health care costs, reducing options and benefits. We urge CMS to take time to ensure proposed changes do not threaten Medicare Advantage’s ability to offer high quality and affordable health care to our nation’s seniors and individuals with disabilities.”

The full report can be found here. This analysis was funded by Better Medicare Alliance. Avalere Health maintained editorial control over the analysis and final results. For more information on the state-by-state impact, click here.

The proposed cuts come as part of the CMS 2024 Medicare Advantage Advance Notice released February 1. CMS is currently accepting public comments through March 3 at http://www.regulations.gov/. Rates are expected to be finalized by April 3.

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