Two Democratic senators waded into the fight last week over Medicare Advantage payment rates for 2024. In letters to the nation’s top seven Medicare Advantage organizations, Sen. Elizabeth Warren (D-MA) and Sen. Jeff Merkley (D-OR) blasted the MAOs for protesting proposed rules they said would result in payment cuts that would potentially hurt enrollees in lost supplemental benefits, such as home care.
“In 2022, the seven major Medicare Advantage health care insurers — UnitedHealthcare, CVS/Aetna, Cigna, Elevance Health, Humana, Centene, and Molina — brought in revenues of $1.25 trillion and reported total profits of $69.3 billion, a 287% increase in profits since 2012,” Warren and Merkley wrote. “But rather than investing in benefits for patients, these seven health insurers instead spent $26.2 billion on stock buybacks.”
The senators accused the health insurers of engaging in scare tactics, such as claiming that the proposed rule would cut payment to MAOs, which would result in higher premiums and skimpier benefits to MA beneficiaries.
MAOs have been on the defensive since the Centers for Medicare & Medicaid Services released the 2024 advance notice for Medicare Advantage in early February. CMS said the rule would provide a 1.03% rate increase next year for MA plans. However, the private health insurers contend the increase is erroneous and is based on an internal estimate of how MA plans will code. The companies claim the proposed rule would actually result in a 2.27% cut in payments.
A review of the proposed rule last week in Health Affairs said it could result in modest premium increases of approximately $60 a year for beneficiaries and an increase in annual deductibles of approximately $27.
MA plans have been coming under increasing scrutiny as they grow in popularity among seniors. Approximately 48% of Medicare-eligible seniors are enrolled in the plans, which commonly offer supplemental benefits, including home care, meals and transportation.
A report earlier this month by the Kaiser Family Foundation found MA plans have become profit centers for private health insurers, with average gross profit margins that are more than double those of Medicaid managed care plans, individual plans and group plans.