No, the Biden administration isn't proposing cuts to Medicare Advantage benefits
Potential cuts to Medicare benefits have been a for
Now, recent advertisements claim President
Many VERIFY readers have also asked if it's true that the Biden administration is proposing cuts to Medicare Advantage.
Is the Biden administration proposing cuts to Medicare Advantage plan benefits?
* , Ph.D., associate director of the Program on Medicare Policy at
* , M.D., fellow at the specializing in health care policy and Medicare
No, the Biden administration is not proposing cuts to Medicare Advantage plan benefits.
The federal government has proposed changes to how insurance companies that offer Medicare Advantage are paid, but those changes don't require benefits cuts for enrollees.
WHAT WE FOUND
Medicare is federal health insurance for anyone age 65 and older, and some people under 65 with certain disabilities or conditions. It's made up of four parts: A, B, C and D.
Traditional Medicare offered by the federal government includes Part A hospital insurance and Part B medical insurance.
, sometimes called Part C, are offered by private companies approved by Medicare, rather than the federal government. Those plans will provide your Part A and Part B coverage.
Most Medicare Advantage plans also Part D prescription drug coverage, and may provide extra benefits such as vision, hearing and dental coverage that aren't included as part of traditional Medicare.
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Some of the recent advertisements claim the Biden administration is proposing "massive cuts" to Medicare Advantage that could reduce benefits by hundreds of dollars per retiree. At least one of those ads is funded by the American Action Network, a conservative issue advocacy group.
Two recent announcements from the Biden administration are likely behind the claims about cuts to Medicare Advantage benefits.
One is a rule change that would allow the federal government to recover past overpayments to Medicare Advantage insurers and is set to take effect in
But the Biden administration isn't proposing cuts to Medicare Advantage benefits for seniors, and Medicare experts say.
Here's a breakdown of those proposed changes.
The is set to take effect on
Studies and federal government audits "have shown that private insurance companies have charged billions of dollars in overpayments to Medicare Advantage plans" for , according to HHS and the
CMS is required by law to "ensure accurate payments and prevent fraud, waste, and abuse." Audits, which are part of that process, are "unequivocally not cuts," according to HHS.
Other proposed changes would modify how Medicare Advantage insurers are paid
While some of the changes in the proposal will reduce payments to Medicare Advantage insurers, the that the total effect of proposed policies and other changes will be a 1% increase in payments to insurers per enrollee in 2024.
Because of this increase, HHS asserts that the Biden administration "is not reducing payments to Medicare Advantage."
So what do these proposed changes do?
Some would impact the risk adjustment model for Medicare Advantage, which essentially determines how much the federal government pays insurers based on patient diagnoses.
The proposed changes would make the risk adjustment model "less generous to the plans,"
But the risk adjustment changes don't amount to a cut in benefits for enrollees, according to Berenson.
"There will be less payments going to the health plans, but there's no requirement that beneficiaries lose anything," he said.
That will be up to the insurance companies.
Some industry stakeholders, such as the , claim that these changes will lead insurers to cut benefits or increase premiums for Medicare Advantage enrollees. But Fuglesten Biniek said she thinks that outcome is unlikely.
"These plans have generous payments right now from the federal government. They have a good amount of cushion," she said. "In addition, they compete by offering plans with zero supplemental premiums [and] plans that have robust extra benefits. This is an attractive market for them to participate in."
Insurers can lower administrative costs, reduce their marketing expenses or cut some of their profits before cutting benefits, which are how they remain competitive in the market, she added.
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