Medicare Advantage Carriers See 'No Choice' But to Accept Cuts

Christopher Cheney, for HealthLeaders Media , July 29, 2014

With Medicare programs taking a $300 billion hit to help fund value-based healthcare reforms under the Patient Protection and Affordable Care Act, Medicare Advantage health plans are feeling the pinch.

Among the lawmakers in attendance, last week's House Ways and Means healthcare panel hearing on Medicare Advantage featured partisan fireworks over reimbursement rate cuts to the value-based healthcare insurance program.

The testimony of a key witness, Chris Wing, CEO of Long Beach, CA-based SCAN Health Plan, displayed some of the economic responses insurers are making to adjust MA drug and health insurance policies in response to the federal cutbacks.


Chris Wing
CEO of SCAN Health Plan

With $300 billion slated to be slashed from MA and traditional fee-for-service Medicare programs to help fund the Patient Protection and Affordable Care Act, insurers have to respond, he testified. "We are evolving to these cuts, we have no choice," Wing stated in his opening remarks.

SCAN is a not-for-profit Medicare Advantage Prescription Drug plan with about 170,000 members in California and Arizona. Wing, who offered testimony on both MA prescription drug plans and MA health plans, said 38 percent of seniors in California are enrolled in MA health plans. Affordability is a prime enrollment draw, and 90 percent of SCAN members pay no premium for their Medicare prescription drug benefit. "No wonder people are voting with their feet and choosing Medicare Advantage. But there are storm clouds on the horizon," he testified.

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