AMA Wants Medicare Imbalance Fixed

Two days after the AMA House of Delegates approved a resolution urging the end of federal subsidies to Medicare Advantage plans, AMA Trustee Robert Wah, M.D., brought the message to the House of Representatives Budget Committee (see AMA Moves Cautiously on Pay for Performance).

“The AMA staunchly supports fiscal neutrality between Medicare Advantage plans and regular Medicare,” Wah told the committee.

“Currently, there is not fiscal neutrality because the government provides Medicare Advantage plans an average 12 percent subsidy per enrollee,” he said. “Instead of making Medicare more sustainable as the baby-boom generation reaches the age of Medicare eligibility, this subsidy has the opposite effect. The Medicare actuary has stated that Medicare Advantage subsidies will shorten the solvency of the Hospital Insurance Trust Fund and that adopting fiscal neutrality between Medicare Advantage and regular Medicare would extend the insolvency date by about two years. The Medicare Advantage add-on averages almost $1,000 per Medicare Advantage enrollee and...this amount is only expected to climb.

“Medicare Advantage costs taxpayers more,” Wah said. “In addition, all seniors, not just those in Medicare Advantage, are paying about two dollars a month in higher premiums to help fund the subsidies.

“The government is providing billions in subsidies to Medicare Advantage plans that only serve 1 in 5 beneficiaries,” he told representatives. “At the same time, physicians in regular Medicare, which serves 80 percent of seniors and disabled beneficiaries, face a 10 percent [reimbursement] cut.

“There are also questions about the access to health care provided by Medicare Advantage,” Wah said. “Patients and physicians are being shortchanged by a significant number of Medicare Advantage plans that are luring their enrollees in with false promises, then skimping on coverage and payments and using the subsidies primarily to increase profits.”