Seniors Could Lose Their Medicare Advantage Coverage Under House Bill

Armen Hareyan's picture
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Thousands of Hawaii seniors enrolled in Medicare Advantage plans could lose their coverage altogether if Congress passes legislation that would slash payments to Medicare Advantage plans.

A study from an independent researcher and former senior health care official in the Clinton Administration, Ken Thorpe, estimates that the proposed cuts in the legislation would result in the possible elimination of Medicare Advantage plans in 22 states forcing 3.2 million seniors to lose their Medicare Advantage coverage, affecting as many as 27,517 beneficiaries in Hawaii alone.

Seniors in these states would have to enroll in the fee-for-service Medicare program, where they would likely receive fewer benefits and pay higher out-of-pocket costs than they do in Medicare Advantage. Higher out-of- pocket costs, in particular, would hit seniors in Medicare Advantage very hard as government data indicate that 49 percent of Medicare Advantage enrollees earn less than $20,000 a year.

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The study referred to legislation, H.R. 3162, which the U.S. House of Representatives is considering that would significantly reduce funding for Medicare Advantage plans between 2009 and 2011.

Echoing Dr. Thorpe's conclusion, Director Peter Orszag from the non-partisan Congressional Budget Office last week said that under H.R. 3162, Medicare Advantage enrollment would fall from approximately 8.2 million currently to 5.5 million in 2012, a reduction of 33 percent from current enrollment levels.

Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), said that millions more would face higher out-of-pocket costs and would lose health care benefits if the proposed cuts become law.

"This legislation would be devastating to millions of seniors who count on Medicare Advantage for their health security," said Ignagni. "Medicare Advantage is a critical option for millions of seniors who count on the better benefits, coordinated care and out-of-pocket protection that Medicare Advantage plans provide."

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