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AHIP Eyes 5.9 Percent MA Payment Cut, Market Disruptions

Christopher Cheney, for HealthLeaders Media, February 28, 2014

A study commissioned by America's Health Insurance Plans is predicting a second consecutive year of deep payment cuts for Medicare Advantage programs which "could result in a high degree of disruption in the MA market."

America's Health Insurance Plans is projecting a 5.9 percent cut to Medicare Advantage payments in 2015 and the group issued a stern warning Thursday that the reduction in funding would have dire consequences for the popular program.

After taking a 6 percent hit in the current year, an MA payment cut of similar size in 2015 "puts at risk the coverage of millions of seniors," AHIP President and CEO Karen Ignagni said during a conference call announcing a study, which was conducted for AHIP by New York-based management consulting firm Oliver Wyman. "You add something of this magnitude… that is a material impact."

Ignagni said the industry association had commissioned the study to help clear up confusion linked to last Friday's notice letter from the Centers for Medicare & Medicaid Services. "One thing we know is there is a lot of confusion and uncertainty about the impact [of the proposed cut]," she said. "There's no one number in the Friday notice, which is what makes this study so important."

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