August 30, 2014

Medicare Payment Disparities Should Be Fixed

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

The Centers for Medicare and Medicaid Services (CMS) last week announced increases of about 0.4 percent in 2015 government payment levels for private insurance plans that some seniors use instead of traditional Fee-for-Service Medicare.

Joshua Gordon, policy director for The Concord Coalition, says this figure came as a bit of a surprise because CMS had earlier suggested that payments to the Medicare Advantage plans would be cut by 1.9 percent. The change comes after months of lobbying by the private insurance industry and lawmakers in both parties.

The government pays insurers more per beneficiary under the Medicare Advantage program than it spends on beneficiaries in traditional Medicare. The Affordable Care Act sought to fix this disparity, and cuts in Medicare Advantage payments are scheduled to continue again after next year. Gordon says it is important that they do so.

The complaints about the payment reductions “are not much different than what we see whenever an attempt is made to control health care costs, or for that matter to reduce deficits in general,” he writes. “The aggrieved have an easy time lobbying for specific benefits, while those trying to reduce costs have a difficult time pointing out the need for general sacrifice.”