Will Republicans and Democrats agree to cut waste in Medicare Advantage?

Republicans and Democrats in Congress claim that they don’t want Medicare cuts.  As we learn more, we find that  “cuts” can mean different things to Republicans and Democrats. Cutting waste is one thing, cutting benefits is another.

President Joe Biden does not want to cut benefits or increase costs for people with Medicare. But, his administration, through the Centers of Medicare and Medicaid Services, “CMS,” has proposed only a one percent rate increase to Medicare Advantage plans in 2024 as a means to reduce waste in Medicare Advantage. According to MedPAC, the agency charge with overseeing Medicare payments and quality, excess payments to Medicare Advantage total $27 billion this year alone.

The one percent payment increase should have no effect on benefits  or out-of-pocket costs in Medicare Advantage. As it is, Medicare Advantage plans receive between six percent and 15 percent more in payments from the government per enrollee than traditional Medicare. And, they receive rebates from the federal government of $196 a month per enrollee on average.

To level the playing field on per enrollee spending with Traditional Medicare, the federal government would need to reduce per enrollee payments to Medicare Advantage plans significantly more than the Centers for Medicare and Medicaid Services is proposing.

Speaker Kevin McCarthy says that he wants to cut waste in federal programs “wherever it is.” The question is will he and his fellow Republicans agree to cut the tens of billions of dollars in annual waste in Medicare Advantage. Or, is that the kind of cut–one that saves taxpayer dollars and cuts into Medicare Advantage profits–that McCarthy and his fellow Republicans oppose?

For every year that Republicans and Democrats don’t agree to cut waste in Medicare Advantage, Medicare Part B premiums rise and the Medicare Trust Fund is depleted, driving up costs in Medicare for older adults and taxpayers alike and weakening the Medicare program.

Here’s more from Just Care:

• Republicans and Democrats can agree: Cut the waste in Medicare Advantage
• House speaker McCarthy opens door to Medicare and Social Security cuts
• Advocates launch pledge campaign to protect Social Security and Medicare
• 2023: Medicare Part D prescription drug coverage and costs
• What’s a durable power of attorney?