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As Medicare Advantage Cuts Loom, Disagreement Over Program's Stability

Christopher Cheney, for HealthLeaders Media, July 28, 2014

The ability of cost savings achieved through healthcare reform efforts to offset the coming cuts to Medicare Advantage is hotly debated at a House Ways and Means health subcommittee meeting.

A decade-long, $300 billion hit to Medicare to help fund the PPACA is coming home to roost.

The question that loomed large Thursday over a hearing before the House Ways and Means health subcommittee centered on gauging the impact of deep cuts to payments for Medicare Advantage—privately operated health insurance policies for seniors that feature value-based healthcare delivery.

Medicare provides health insurance coverage to about 54 million Americans, according to Kaiser Family Foundation. Most beneficiaries have coverage in Medicare's traditional, fee-for-service payment model, with about 15.7 million people enrolled in privately operated MA policies this year.

Everyone in the hearing room, including the four witnesses who testified before the House panel, agreed cuts are coming. But the ability of cost savings achieved through healthcare reform efforts to offset cuts to Medicare Advantage was hotly debated among lawmakers, as well as among those seated behind the witness table.

Rep. Kevin Brady (R-TX), the chairman of the health subcommittee, offered a dark view of cuts to Medicare Advantage, which several GOP members of the panel pegged at an annual average of $3,700 per MA beneficiary.

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