"We find that the payment policies proposed in the 2015 Advance Notice in combination with the continued phase-in of the ACA cuts and other legislative and regulatory cuts… could result in a high degree of disruption in the MA market," the report states. "This includes the potential for plan exits, reductions in service areas, reduced benefits, provider network changes, and MA plan disenrollment due to declines in plan value from 2014 to 2015."
Ignagni said MA insurers are particularly worried about the 41 percent of MA beneficiaries who have annual incomes below $20,000. "They are on very low incomes and they are very cost-sensitive," the AHIP president and CEO said.
CMS is slated to reach a final decision on the 2015 payment level for Medicare Advantage on April 7.
New Political Battle Line
With the Patient Protection and Affordable Care Act a focal point of this fall's mid-term elections in Congress, the proposed payment cut for Medicare Advantage has sparked a political firestorm in Washington.
On Tuesday, six Republican Senators sent a letter to HHS Secretary Kathleen Sebelius, blasting the proposed payment cut. In addition to Senate Minority Leader Mitch McConnell (R-KY) and Minority Whip John Cornyn (R-TX), the letter was signed by Sens. John Barrasso (R-WY), Roy Blunt (R-MO), Jerry Moran (R-KS) and John Thune (R-SD).