Democrats this year likely will seek to reduce payments to private Medicare Advantage plans to cover the cost of other health care proposals, such as revisions to the Medicare physician reimbursement system, House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) told a group of health care policy analysts on Tuesday at an event sponsored by the Urban Institute, CongressDaily reports (Johnson, CongressDaily, 1/23). Urban Institute President Robert Reischauer said that, based on an analysis of 2005 data conducted by George Washington University analyst Brian Biles, the transfer of beneficiaries enrolled in Medicare Advantage plans to the traditional fee-for-service program would save Medicare $5 billion annually. In addition, Reischauer also cited estimates from the Medicare Payment Advisory Commission that Medicare on average spends 10% more on beneficiaries enrolled in Medicare Advantage plans than on those in the traditional fee-for-service program (Reichard, CQ HealthBeat, 1/23). Stark said, "Depending on what is called upon to do in the budget, the overpayment of (Medicare Advantage) plans looks like an attractive pot of money," adding, "I would submit that they certainly will get close scrutiny" (CongressDaily, 1/23).

Some Concerns
However, some health care policy analysts at the event raised concerns about the proposal to reduce payments to Medicare Advantage plans. John Gorman, a former CMS official involved with oversight of Medicare managed care plans, said that "we should never lose sight of the fact that (Medicare Advantage) has been an absolutely key safety net for low-income, unsubsidized Medicare beneficiaries." He added that "we know that a majority of African-American and Latino beneficiaries are already enrolled in Medicare Advantage," which he said "brings the only hope of reducing racial disparities among the elderly." According to Gorman, "This is an investment we are making in infrastructure that really offers the only hope against the explosion of expenditures that we're going to see" in Medicare (CQ HealthBeat, 1/23). In addition, some health care policy analysts said that Democrats from rural states would oppose a reduction in payments to Medicare Advantage plans, which could prompt health care providers to leave rural areas (CongressDaily, 1/23).

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