Senior Citizens in the Middle Again of Fight Between Medicare Advantage Providers and Congress

Feb. 28, 2007 – Senior citizens are once again caught in the middle of a funding fight between insurance companies and the federal government over the Medicare Advantage Program, which was known as Medicare+Choice in the last battle in 2003. Today, there are more than eight million seniors enrolled in this program that provides more services at a lower cost than traditional Medicare, but are often more limited in the health care providers available. Congress previously approved $13 billion in cuts for these programs this year and the new Congress is considering even more. The insurance companies are saying this will lead to higher premiums for their senior customers.

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Back in 1999, there were over six million enrolled in Medicare+Choice, but the insurance companies wanted more federal funding for these programs and began shutting them down when they did not get it. More than a million seniors had lost their coverage by 2003.

The Medicare reform in 2003 gave new financial life to the program and gave it a much needed new name – Medicare Advantage. But, many in Congress have been concerned about the federal dollars flowing into the program. A Congressional Budget Office report this week estimated that Medicare could save about $65 billion over 10 years by equalizing payments to Medicare Advantage plans and fee-for-service providers.

Consumers Overwhelmingly Value Medicare Advantage Program

A leader in the fight for the insurers, Blue Cross and Blue Shield Association, yesterday released a satisfaction survey showing Medicare Advantage "provides valuable benefits and coordinated care."

The association also held a press briefing and said that proposed federal cuts to the Medicare Advantage program could lead to sharp increases in beneficiaries' premiums. (See side bar.)

The lead on the news release by BCBSA said, "Virtually all (97 percent) Medicare Advantage (MA) beneficiaries believe it is important for Congress to work to maintain adequate funding for the MA program."

In addition, BCBSA issued a new report, "Medicare Advantage: Improving Care Through Prevention, Coordination and Management," highlighting, what it call, innovative ways that Blue Cross and Blue Shield companies' MA plans are improving care for Medicare beneficiaries.

"These new reports clearly demonstrate extremely high satisfaction with the Medicare Advantage program and the enhanced value MA plans are bringing to beneficiaries through comprehensive benefits and innovative coordinated care programs," said Scott P. Serota, BCBSA president and CEO.

"Unfortunately, Congress is considering additional cuts to the MA program beyond the $13 billion in reductions already enacted. These cuts would have devastating effects for MA members who are very satisfied with their MA plans and overwhelmingly want Congress to work to maintain adequate funding."

Satisfaction Survey Results

The new survey shows high overall satisfaction with the MA program, which provides coverage to more than 8.3 million Medicare beneficiaries. More than 8 out of 10 survey respondents (84 percent) said they are happy with their healthcare coverage and 75 percent would recommend MA to their friends or family members.

The survey also shows that beneficiaries believe sustained funding for the MA program is crucial, and nearly all survey respondents said it is important for Congress to work to maintain adequate funding for the program. Many worry that Medicare cuts could mean they could not afford to pay the bill for an unexpected illness (48 percent) or afford prescription drugs (45 percent).

Daily Reports

KaiserNetwork.org

Proposed Cuts to Medicare Advantage Plans Would Lead to Higher Costs, Reduced Coverage for Beneficiaries, BlueCross BlueShield Association Officials Say

BlueCross BlueShield Association officials at a press briefing on Tuesday said that proposed federal cuts to the Medicare Advantage program could lead to sharp increases in beneficiaries' premiums, the Pittsburgh Post-Gazette reports.

Congress has approved $13 billion in cuts to the program starting this year. In addition, legislators are considering further cuts to the program as they work to balance spending priorities (Sherman, Pittsburgh Post-Gazette, 2/28).

A Congressional Budget Office report released this week estimated that Medicare could save about $65 billion over 10 years by equalizing payments to Medicare Advantage plans and fee-for-service providers.

BCBS officials said that cuts to the program could lead to negative consequences for seniors enrolled in Medicare Advantage plans, including premium increases, significant benefit reductions and perhaps a total loss of their plans.

BCBS President Scott Serota said additional cuts "would have devastating effects for MA members who are very satisfied with their MA plans and overwhelmingly want Congress to work to maintain adequate funding."

According to a poll released by BCBS, 97% of Medicare Advantage beneficiaries "believe it is important for Congress to work to maintain adequate funding for the MA program." BCBS officials also said the cuts would undermine "coordinated care" programs, which make care more efficient and effective by providing "the right care at the right time in the right place."

Coordinated care programs also help seniors maintain quality preventive and post-operative care, officials said. Alissa Fox, BCBS vice president for policy, said cuts to the program could result in many seniors dropping out of plans, as happened in the late 1990s when payments decreased (Reichard, CQ HealthBeat, 2/27).

Fox said, "Further cuts to the program would have absolutely disastrous consequences." About 8.3 million U.S. residents are enrolled in the Medicare Advantage plans (Pittsburgh Post-Gazette, 2/28).

"Reprinted with permission from kaisernetwork.org You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation. All rights reserved.”

Other key findings from the survey:

● Three-quarters of MA beneficiaries said their health plan is better than traditional Medicare;

● Low monthly premiums, quality of care and prescription drug coverage ranked as the most important benefits when choosing a health plan; and

● While many beneficiaries ranked healthcare coverage in this country as fair or poor (65 percent), most ranked their own health plan coverage in MA as good or excellent (67 percent).

BCBSA Chronic Care Management Report

"Medicare Advantage: Improving Care Through Prevention, Coordination and Management," includes 11 examples of Blue Cross and Blue Shield chronic care initiatives that are improving care for Medicare beneficiaries. Eighty-two percent of Medicare beneficiaries have at least one chronic condition and 65 percent have multiple chronic conditions.

BCBSA said a September 2006 report by the Institute of Medicine, traditional Medicare "does little to encourage coordinated, preventive, and primary care that could save money and produce better health outcomes."

In contrast, MA plans provide traditional Medicare benefits plus supplemental coverage in a comprehensive plan whose reimbursement structure encourages a focus on prevention and care coordination, reduces financial barriers to care, and creates an environment that fosters quality of care and satisfaction among members, according to BCBSA.

One case study included in the report is the Connections Health Management Program created by Independence Blue Cross (IBC). The program resulted in a decrease in inpatient days, and most importantly, high customer satisfaction ratings by providing specialized care to beneficiaries with the five most common chronic illnesses -- asthma, diabetes, chronic obstructive pulmonary disease, chronic heart failure and coronary heart disease.

"The coordination of benefits available under MA has been integral to improving the quality of care for beneficiaries," said Dan Lyons, M.D., senior vice president, government programs at IBC. "Our Connections kidney program resulted in 12 percent fewer emergency room visits than expected and 19 percent fewer days at a skilled nursing facility than expected in its first year."

Highmark Blue Cross Blue Shield has several case studies profiled in the report. Judith Black, M.D., medical director of senior products for Highmark Blue Cross and Blue Shield, noted that the Diabetes Disease Management Program demonstrated measurable improvements in HEDIS(R) diabetes care measures, with scores that exceeded national averages in all measured areas. "Medicare Advantage is valuable because of the continuum of care that seniors and others receive through the program," she said. "MA gives beneficiaries access to education and healthcare programs that they may not receive under traditional fee-for-service programs."

The report also includes a diabetes management program from WellPoint, Inc. demonstrating how case management, member interventions and a provider pay-for performance program, resulted in consistent improvement of HEDIS measures in diabetes care. "Chronic illnesses such as diabetes affect millions of Medicare beneficiaries and are best treated through coordinated care," said Sam Cramer, M.D., vice president of clinical programs for WellPoint, Inc. "Our diabetes management program is just one example of beneficial chronic care management programs accessible through MA plans."

Referring to the report, Serota said, "These innovative Medicare Advantage programs focus on providing high quality, coordinated care over the entire course of a disease, rather than focusing on individual episodes of care. If funding were cut, many MA beneficiaries who experience improved outcomes and quality of life and lower out-of-pocket costs may see their access to beneficial programs such as these stripped away."

For more information, and to download the survey executive summary or a copy of the report: "Medicare Advantage: Improving Care Through Prevention, Coordination and Management," please visit http://www.bcbs.com/issues/medicare.

The Blue Cross and Blue Shield Association is made up of 39 independent, locally operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for more than 98 million Americans. For more information on the Blue Cross and Blue Shield Association and its member companies, please visit http://www.bcbs.com/.

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