The Future of Medicare Advantage: Are We on the Right Path?

June 10, 2013

Big changes are coming to Medicare Advantage, through which 28 percent of Medicare beneficiaries now get coverage in such private health plans as HMOs and PPOs. A June 10 Alliance briefing looked at the program’s chances for survival and growth. 

The Patient Protection and Affordable Care Act (ACA) reduced payments to Medicare Advantage plans to bring them more in line with costs under traditional Medicare. However, the ACA authorized new quality-based bonus payments to the plans, and the Centers for Medicare and Medicaid Services (CMS) subsequently expanded the bonuses, which partly offset the reductions.

More recently, CMS announced a change in the assumptions made in the calculation of Medicare Advantage payments that results in a 3.3 percent payment increase for plans for 2014 instead of a scheduled 2.3 percent payment reduction. The revised calculations assume that Congress will cancel a reduction in physician payments scheduled to occur in January 2014.

How are Medicare Advantage plans expected to respond to payment changes over the next several years? Have the quality bonus payments induced significant changes in patient care or plan choices? What implications could such decisions have on beneficiaries with regard to premiums, benefits and choice among plans?

· Gretchen Jacobson, associate director at the Kaiser Family Foundation’s Program on Medicare Policy, provided an overview of the Medicare Advantage program.

· Mark Miller, executive director of MedPAC, which advises Congress on Medicare payment policy,  reviewed how Medicare pays Medicare Advantage plans, and highlight MedPAC’s past recommendations on payment policy and the quality bonus (star rating) system.

· Alissa Fox, senior vice president in the Office of Policy and Representation at Blue Cross and Blue Shield Association, presented the industry’s perspective on how Medicare Advantage plans are responding to changes in payment policy and preparing for future reductions in payments and new delivery system reforms.

· Carl McDonald, director at Citi Investment Research, addressed the long-term viability of Medicare Advantage health plans and their budgetary situation.

Ed Howard of the Alliance and Diane Rowland of Kaiser co-moderated.

The forum will took place on Monday, June 10 at the Dirksen Senate Office Building, Room G-50.

Contact: Marilyn Serafini (202)789-2300

The event is sponsored by the nonpartisan Alliance for Health Reform and The Kaiser Family Foundation.


Full Transcript (Adobe Acrobat PDF)

Speaker Presentations

Alissa Fox Presentation (Adobe Acrobat PDF)
Carl McDonald Presentation (Adobe Acrobat PDF)
Mark Miller Presentation (Adobe Acrobat PDF)
Gretchen Jacobson Presentation (Adobe Acrobat PDF)

Event Details

Agenda (Adobe Acrobat PDF)
Speaker Biographies (Adobe Acrobat PDF)

Event Resources