An HHS official said the Medicare Advantage program, the managed care program that is up for payment cuts, has failed to meet its goal of providing care at lower costs than Medicare fee-for-service, according to a report by the Albany Times-Union.
Jaime Torres, regional director of the New York office of HHS appointed in April by HHS Secretary Kathleen Sebelius, said Medicare Advantage's approach of using private managed care plans for Medicare patients was supposed to bend the cost curve, but it actually costs more than regular Medicare.
On average, HHS is paying Medicare Advantage plans $1,000 more per beneficiary for the same services as regular Medicare, he said. Viewed another way, HHS has reported the average Medicare Advantage beneficiary costs roughly 14 percent more than the Medicare fee-for-service beneficiary.
The healthcare reform law will cut subsidies to Medicare Advantage plans by roughly $145 billion over the next 10 years, with a freeze on payments starting next year and cuts starting in 2012. Meanwhile, some accountable care organizations created under the law are expected to receive capitated payments similar to what Medicare Advantage plans have been getting.
Medicare Advantage, created under the Bush administration, is championed by Congressional Republicans, and the program is popular with Medicare beneficiaries. In New York, for example, about 63 percent of beneficiaries are enrolled in Medicare Advantage plans, and in many communities they can choose from among several plans.
While private insurers have been raising premiums, Medicare Advantage plans have dropped premiums by 1 percent for 2011. But those in the Albany, N.Y. area, at least, have increased out-of-pocket costs by thousands of dollars, according to Medicare advocates.
Read the Times-Union report about Medicare Advantage.
Read other coverage about Medicare Advantage:
- CMS Proposes Bonuses for Medicare Advantage Plans Based on Patient Satisfaction
- CMS Cracks Down on Medical Advantage Plan for Commenting on Reform Bill to Beneficiaries
- GOP Senators Opposing Medicare Advantage Cuts Seek Data
Jaime Torres, regional director of the New York office of HHS appointed in April by HHS Secretary Kathleen Sebelius, said Medicare Advantage's approach of using private managed care plans for Medicare patients was supposed to bend the cost curve, but it actually costs more than regular Medicare.
On average, HHS is paying Medicare Advantage plans $1,000 more per beneficiary for the same services as regular Medicare, he said. Viewed another way, HHS has reported the average Medicare Advantage beneficiary costs roughly 14 percent more than the Medicare fee-for-service beneficiary.
The healthcare reform law will cut subsidies to Medicare Advantage plans by roughly $145 billion over the next 10 years, with a freeze on payments starting next year and cuts starting in 2012. Meanwhile, some accountable care organizations created under the law are expected to receive capitated payments similar to what Medicare Advantage plans have been getting.
Medicare Advantage, created under the Bush administration, is championed by Congressional Republicans, and the program is popular with Medicare beneficiaries. In New York, for example, about 63 percent of beneficiaries are enrolled in Medicare Advantage plans, and in many communities they can choose from among several plans.
While private insurers have been raising premiums, Medicare Advantage plans have dropped premiums by 1 percent for 2011. But those in the Albany, N.Y. area, at least, have increased out-of-pocket costs by thousands of dollars, according to Medicare advocates.
Read the Times-Union report about Medicare Advantage.
Read other coverage about Medicare Advantage:
- CMS Proposes Bonuses for Medicare Advantage Plans Based on Patient Satisfaction
- CMS Cracks Down on Medical Advantage Plan for Commenting on Reform Bill to Beneficiaries
- GOP Senators Opposing Medicare Advantage Cuts Seek Data