![New bipartisan survey: Seniors oppose reducing Medicare Advantage funding — and will vote accordingly](https://bettermedicarealliance.org/wp-content/uploads/2024/02/Vabson-Donahue-Headshot.png)
New bipartisan survey: Seniors oppose reducing Medicare Advantage funding — and will vote accordingly
By Mary Beth Donahue, President and CEO, Better Medicare Alliance and Boris Vabson, Ph.D., Research Faculty at Harvard Medical School and Nonresident Health Policy Fellow at the American Enterprise Institute and the USC-Schaeffer Center
Thirty-two million beneficiaries rely on Medicare Advantage for affordable, high-quality care. While the program continues to grow, beneficiaries’ needs also grow. As the Centers for Medicare and Medicaid Services (CMS) is committed to setting next year’s policies for the Medicare Advantage program, it’s critical that the agency support program stability for the millions of seniors and people with disabilities who depend on it. To do that, it is important for CMS to fully account for rising health care utilization rates among beneficiaries as well as ongoing increases in medical prices.
An aging population uses more health care, and 2024 will see the highest number of people turning 65 in the United States in history—a trend that is only expected to accelerate in coming years. Additionally, advances in telehealth adoption, in-home care, and pent-up demand for care delayed by the COVID-19 pandemic are contributing to even greater demand for services, especially among seniors. Prices for medical services and provider payment rates are also increasing. The simultaneous increases in health care demand and health care prices represent a perfect storm of increases in medical costs.
These ongoing trends are putting cost pressures on the Medicare Advantage program, which is chosen by more seniors and people with disabilities. On average, beneficiaries enrolled in the program can save up to $2,400 annually on premiums and out-of-pocket costs, compared to beneficiaries in fee-for-service Medicare. The program is also reaching historically underserved seniors, including socioeconomically disadvantaged populations who are especially helped by the extra benefits allowed by the program. Medicare Advantage now serves more than half of the overall Medicare population and covers an even greater share of minority populations, including 69% of Latino Medicare beneficiaries, 65% of Black Medicare beneficiaries, and 60% of Asian Medicare beneficiaries.
At the same time, recent and proposed policy changes will also put additional pressure on the Medicare Advantage program. The program continues to adjust to significant policy changes implemented in recent years, including the phase-in of a new risk model, additional changes to the way the program is administered and funded, along with reforms supported by BMA such as modernizing the prior authorization process and ensuring accuracy and transparency in marketing for beneficiaries.
Given the sharp increase in utilization, ongoing medical price increases, along with ongoing adjustments to recent policy changes, Medicare Advantage payment policy must evolve in tandem to maintain program stability. More recent and complete data must be incorporated when finalizing the rate notice, reflecting current utilization and cost trends to promote continued progress in advancing health equity, preventing disease progression, and delivering affordable, high-quality care for seniors.
Recent analysis from Berkeley Research Group (BRG) estimates that CMS’ proposed 2025 payment rules will reduce Medicare Advantage payments by an estimated 1%, even before factoring in the growth in costs, which BRG estimates could be 4% to 6%. They estimate that CMS’ payment reduction will lead to an average $33 per month reduction in the value seniors receive from the program. That means fewer supplemental benefits, higher premiums, or less cost sharing. For dual eligible beneficiaries, BRG’s research indicates an even greater reduction of as much as $50 per month.
BMA and Medicare policy experts are concerned with any regulatory changes that result in a negative impact on beneficiaries and that are destabilizing to the Medicare Advantage program as a whole. To that end, we encourage CMS to recognize that its proposed payment level could have negative knock-on effects for Medicare beneficiaries and the Medicare Advantage program overall. As demonstrated in numerous academic and policy studies, including the recent BRG analysis, reductions in Medicare Advantage payment fall on beneficiaries. Studies have also shown that payment reductions lead to reductions in Medicare Advantage supplemental benefits, as well as increases in Medicare Advantage cost-sharing and premiums.
As millions of American seniors and people with disabilities rely on Medicare Advantage for the quality, affordable health care it provides, it’s essential that it remain a strong, stable health care coverage option for seniors.