Millions of older Americans are bracing for cuts to Medicare Advantage plans announced by the White House last month, as a bipartisan effort in Congress builds to advocate for seniors.
Medicare, the federal health coverage program for people over 65, today covers about 67 million people, or about 20 percent of the population, according to the Centers for Medicare and Medicaid Services.
This number is expected to reach more than 90 million by 2030.
More than half of Medicare enrollees today have chosen MA plans administered by private insurers with government funding for their more generous benefits, higher quality health outcomes and lower prices.
MA projects have increased steadily as America has aged; in 2003, only 13% of the Medicare-eligible population used them.
Seniors who enroll in MA typically receive prescription drug, vision and dental benefits, no 20% coinsurance, and maximum out-of-pocket caps: everything that in the traditional Medicare program, constitutes patient costs or additional premiums and enrollment in Medicare Part D and Medigap.
MA plans are designed to deter billing for unnecessary care common in traditional Medicare, keep patients out of the hospital if they can be treated elsewhere, and incentivize providers to explore ways mental health problems like depression can have an impact on physical health.
However, critics of MA say that while these plans are popular, they over-reimburse and deny care too frequently.
The main reason the plans are paid more than traditional Medicare is that the program's risk adjustment system, which is supposed to capture differences in the amount of care people need between Medicare Advantage and traditional Medicare, doesn't work. not very good, said Matthew Fiedler, a senior fellow at the Center on Health Policy at the Brookings Institution.
CMS changed the rules last year with the stated goal of reducing funding for MA plans to force them to cut benefits. This rule change is being phased in over three years and removes funding for many diagnostics that will have significant negative impacts on physicians caring for patients with AN. This includes cutting funding to prevent complications of vascular disease before they occur.
In addition to the three-year plan, CMS recently announced a 0.16% reduction in MA reimbursements for insurers effective January 1. This is what CMS defines as the health care spending inflation rate.
This could translate into a $33 monthly reduction in benefits for the 2.8 million Florida seniors enrolled in MA, with companies hinting at higher costs for patients and reduced benefits when they announce benefits for 2025.
This measure comes at a time when inflation is running at 3.1% per year and the costs of health care costs provided by the private sector are increasing by 7%.
Even though it's only a net decrease of 0.16 percent, the cost of health care continues to rise, said Steven Ullman, director of the Center for Health Management and Policy at the Herbert University of Miami Business School.
He expects suppliers to see their costs fall further.
There will be problems there, Ullman said. There are tensions between insurers, providers and, ultimately, patient consumers.
This year, UnitedHealth cut some Medicare Advantage services and ended some plans.
Recently, Humana, which gets 80% of its revenue from the federal program, announced it would cut some benefits in 2025 and end some plans.
CVS Health, which covers 26 million people with health insurance through Aetna, announced last week that it would launch a multiyear plan to increase profitability in Medicare Advantage after losing 48% of its net profit this year.
Cigna is exploring the possibility of selling its Medicare Advantage plans.
Walgreens, owner of VillageMD, has closed all primary care practices in Florida, Illinois and Indiana while exploring other states to shutter operations. And these changes will be reflected locally even in the Villages, where the median age is 68.3 years.
Health insurance in the villages
When someone comes to Ryan White's office for help from Medicare, they are usually stressed. White is the principal/owner of R&K White Financial Corp in Wildwood.
It can be intimidating, he says.
SHINE's local chapter, Serving Health Insurance Needs of Elders, a free program in which trained volunteers provide Medicare counseling, also sees its share of anxious people.
Some are very knowledgeable from the moment they arrive, said Bob Follas, SHINE volunteer advisor and Polo Ridge Village resident.
“Those are the ones where we say, ‘Hey, do you want to be a counselor?’” he joked. “But most of the time there is a lot of stress when people watch healthinsurance.gov and say “What the hell am I supposed to do?”
White sees the conversation moving more toward MA plans.
Value plan options are so strong in our area (The Villages) and market that they are a natural fit for most area residents, White said.
The number of people enrolled in Medicare Advantage in The Villages MSA exceeded the number enrolled in traditional Medicare for the first time in 2022, according to CMS. At the end of 2023, approximately 54.1% of beneficiaries relied on an MA health plan.
MA is popular with patients at The Villages Health, which bills for the program through three companies.
Officials say the reductions directly affect operations.
They will slow down plans to add new specialty positions and expand additional services such as weekend clinic hours.
Traditional Medicare patients seen at specialty care centers will have to be moved to the bottom of the list of new patients, said Dr. Jeffrey Lowenkron, chief medical officer.
We have made a service commitment to our AD patients that we will uphold, he said. These cuts hit middle-class, fixed-income and low-income residents hardest, and would not break our promise to them.
The cuts are a reversal from President Joe Biden's State of the Union address this year, in which he promised that if anyone tried to cut Medicare, I would stop them.
Still, Lowenkron, who has worked with leading advocates in Washington, D.C. to stop future cuts, said protecting the program is a high-profile issue, not a political one.
Physician groups who participate in patient care under MA plans are experiencing significant reductions that will trickle down this year with phased reductions in 2025 and 2026. This year, they trimmed the fat. Next year they will cut the muscles, and in 2026 they will have to cut the bones, he said. Physician groups across the country and in Florida participating in MA have all halted their growth plans or are scaling back operations. With nearly 5 million more 65-year-olds becoming newly eligible for Medicare in the coming year, who will take care of it? CMS funding cuts, which primarily affect physician practices, undermine the desire and ability to grow. We must work together to solve this problem, because new Medicare enrollees will have fewer choices in the future and will be destined to receive the fragmented and uncoordinated services that have marked traditional Medicare.
A bipartisan bloc of US senators has formed for this very purpose.
What's happening in Washington
Florida Senators Rick Scott and Marco Rubio both joined 38 other Republicans, 19 Democrats and two independent peers to urge the White House to protect and strengthen the Medicare Advantage program for current and future beneficiaries.
At least 46 members of the House of Representatives have signed a similar petition.
Scott and Rubio stand shoulder to shoulder with Democratic heavyweights such as Senate Majority Leader Chuck Schumer, former presidential candidate Sen. Amy Klobuchar and Sen. Tammy Duckworth, vice chair of the Democratic National Committee.
This war on seniors is disastrous, especially for seniors on fixed incomes who are already struggling with soaring inflation, Scott said in a statement April 3, as budget cuts for 2025 were announced. Nearly 60% of Medicare beneficiaries in Florida choose Medicare Advantage because it works. I will fight like hell to reverse this terrible decision.
The coalition is supported by the American Medical Group Association, Americas Physician Groups, AMAC Action, Council for Citizens Against Government Waste, Americans for Tax Reform, Center for a Free Economy, Consumer Choice Center, Market Institute , Americans for Prosperity. , the Taxpayers Protection Alliance and the 60 Plus Association.
Biden has already cut $4.7 billion in funding for Medicare Advantage, but the specter of further cuts to health benefits for seniors in an election year could put pressure on the administration.
Seniors over 65 are a vital voting bloc that continually punches above its weight class. Sumter County sees some of the highest voter turnout rates in Florida.
Most recently, the county was number one in the March presidential primary and the 2022 general election.
Nationally, the Census Bureau notes that older adults were overrepresented in every congressional election since 1978 inclusive.
All of these voters will be opening their mail this fall to see how their media coverage is changing as they go to the polls.
It's a very steep hill, Lowenkron said, but it's a very important hill to try to climb.
Feature editor Leah Schwarting can be reached at 352-753-1119, ext. 20.5375, or [email protected].
