Both political parties are more open to Medicare Advantage (MA) reform than in previous election cycles, a shift former federal officials warned should be a warning call for the health insurance industry to refocus its messaging and advocacy efforts surrounding the plans.
Scrutiny is ramping up among Democrats concerned MA is not a good deal for taxpayers and within a group of more populist Republicans, whereas there used to be more bipartisan agreement on the program’s importance.
“I think the consensus around MA is eroding somewhat,” said Alex Azar, former Department of Health and Human Services secretary for President Donald Trump, during a recent webinar hosted by consulting firm Avalere.
The Centers for Medicare & Medicaid Services (CMS) finalized its 0.16% cut of MA benchmark payments in March, causing an uproar of pushback from insurers saying the decision would result in layoffs, a retreat from service areas and fewer supplemental benefits for members.
Some lawmakers hoped CMS wouldn’t go through with the plan, while others pointed to a MedPAC report that found Medicare is projected to overpay MA plans by $88 billion as compared to what traditional Medicare would’ve received.
“I think some of those [cuts] may come back to haunt them on Oct. 15 when open enrollment comes and we see either increased cost sharing, reduced benefits or increased premiums as a result of what they’ve done two weeks before the election,” Azar said.
Avalere Health Managing Director Sean Creighton said the MedPAC analysis was flawed, echoing Azar’s belief that the report is “nonsense” and “terrible.”
“I do think it behooves the industry to do a lot of myth busting out there on MA,” said Azar. “That’s not to say there aren’t problems with maybe how certain operators have done things. It is a fallacy that MA plans are so profitable and high margin.”
Next month, AHIP will spend seven figures on digital advertising to persuade older Americans to protect MA, Politico reported. The industry is attempting to rebuff efforts to minimize its importance, with more than 32 million enrollees.
Morgan Health CEO Dan Mendelson agrees that both parties are looking to crack down on bad behavior in MA.
“I think there’s a real opportunity right now for the plans to engage in a positive way, to find the value proposition and stabilize things," he said.
He also expects Democrats to push for adding dental and vision to the base of Medicare, a policy backed by Bernie Sanders, I-Vermont, and progressive Democrats, though Vice President Kamala Harris' campaign has retreated from her original "Medicare for All" stance.
She will also build up the Biden administration’s attempts to lower drug prices through the Inflation Reduction Act and ban medical debt in credit scores, though specific policies have been sparse for Harris and Trump.
“Both of these candidates are not obsessive about the details,” said Mendelson.
During a recent speech in battleground state North Carolina, Harris said she would also fight against “pharmaceutical middlemen.” Pharmacy benefit managers are a constant source of bipartisan scorn in Congress and among federal regulators.