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Brady Opening Statement: Hearing on the Future of Medicare Advantage Plans

July 24, 2014

Today we will hear testimony regarding the Medicare Advantage program.  We will hear about these private plans that are chosen by increasing numbers of seniors.  We will hear how these private plans can combine high quality and low costs.
We will look at the future of this popular program and ask, when the scheduled cuts to Medicare Advantage plans in the Affordable Care Act take place, can these popular plans continue to effectively serve seniors?  Will the policies of the Obama Administration narrow choice and plan flexibility, further impacting our seniors?
Since seniors were first given the option to select a private health plan to receive their Medicare benefits they have shown a strong preference for these plans.
Over the past decade enrollment in Medicare Advantage has tripled.  Of new enrollees, more than half choose a Medicare Advantage plan over traditional fee for service.

Today, nearly sixteen million seniors are receiving their benefits through these private plans.
Medicare Advantage plans are particularly popular with low income and minority seniors since these insurance plans are able to provide caps on out-of- pocket costs, coordination of care for seniors, and more predictable costs.
The seniors that choose these plans are highly satisfied with the coverage and benefits they receive.
Unfortunately, many of our elderly could lose access to the plans they have and like because of cuts that are just beginning to hit that are a part of President Obama’s Affordable Care Act.

Knowing just how unpopular these cuts were with the seniors that select these plans, the White House – acting through a new “demonstration” program and other regulatory actions – masked and delayed the impact of the initial stages of the $300 billion in cuts past the November 2012 elections.
Those political delays are over.  The difficult reality is 2015 is now upon us and millions of seniors who rely on the Medicare Advantage program may be in jeopardy of losing their plan, their doctor, and the financial protection and benefits they have chosen.

The future for Medicare Advantage may look grim.  The questionable $8.3 billion quality bonus payment demonstration program used to mask the ACA cuts is coming to an end.  

In addition, the new payment methodology for Medicare Advantage plans that assume Congress will fix the way Medicare pays physicians is only temporary.  

This leaves the looming threat that Medicare Advantage plan rates could again include the broken physician reimbursement formula, unless we finally and permanently fix the way Medicare pays physicians.
Instead of improving the situation, CMS’s regulatory actions are threatening plans through potential termination and limiting their ability to innovate.
For example, plans serving largely low-income populations find themselves struggling to meet the demands of the Medicare Advantage Star Rating system.  That could place them in jeopardy of being terminated in this coming year – weeks before Open Enrollment is to begin.
Ironically, high-performing Medicare Advantage plans are also in the cross-hairs.  
Plans that have consistently found ways to be rated highly in the Stars system now find themselves unsure of what supplemental benefits they must cut going forward due to backwards incentives under a benchmark cap created by the ACA.
As many of us predicted following the passage of the controversial Affordable Care Act, seniors and Medicare Advantage health plans have not yet experienced the full impact of these cuts.  As the full impact of these cuts is felt in the coming years, could millions of seniors be forced out of the plans they have and like?
A report released Monday by the American Action Network has mapped out likely benefit cuts per Medicare senior by congressional district, which I would like to enter for the record.

The report points to one glaring conclusion – seniors in every district in America, Republican or Democrat, now face damaging cuts to the health care and pharmacy benefits they selected because they fit their needs.
The Medicare Advantage program is popular among our nation’s seniors because it provides seniors with choices, to select the plan that best fits their needs.  We need to ensure seniors continue to have this valuable option.

It’s no surprise then that many members of Congress – even our colleagues in the Senate – have recognized the challenges facing seniors and have come out in bipartisan opposition to further cuts to Medicare Advantage.
Today we will hear from witnesses who will tell us the current picture of Medicare Advantage – the good, the bad, and yes maybe even the ugly.  But I am confident, that as we look forward and work together, we can break down barriers and improve Medicare Advantage for America’s seniors who depend upon these critical plans.
The ACA brings new level of uncertainty to those who depend on Medicare Advantage.  The time is now to consider the future of the Medicare program, and the importance Medicare Advantage plans play for a growing number of seniors.
This subcommittee will hold the Administration accountable to carefully examine the impact that any changes to Medicare health plans will have on seniors, the Medicare program, and ultimately to taxpayers. 

We must work together to make sure that our nation’s seniors continue to have choices in their care and benefits.