House Ways & Means Committee Health Subcommittee Discusses Impact of ACA Mandated Cuts to Medicare Advantage
Tuesday, July 29, 2014

Section: Public Policy and Advocacy

On July 24, The Health Subcommittee of the House Ways & Means Committee held a hearing, “The Future of Medicare Advantage Health Plans” to discuss the impact of ACA mandated cuts on the program. In his opening statement, Chairman Brady touted the growth of MA plans over the last decade and their accessibility for dual eligible beneficiaries. However, he said, cuts are coming to these plans due to provisions in the ACA. Chairman Brady said that because of the $300B cuts projected to hit plans in 2017, seniors will lose benefits, networks will narrow, and plans will increase premiums.

Chairman Kevin Brady (R-TX) and his Republican colleagues asked witnesses how spending cuts that are part of the ACA would affect seniors who are enrolled in Medicare Advantage (MA) plans. Ranking Member Rep. Jim McDermott (D-WA) and Democrats refuted the premise of the hearing and noted that the harm to seniors that has been projected by some analysts has not come to fruition. Three of the witnesses testified that, because of the ACA’s cuts to MA payments, beneficiaries would see higher premiums, more narrow networks and an overall decrease in benefits. The minority’s witness, Mr. Joe Baker of the Medicare Rights Agency, testified that Medical Loss Ratios are helping to decrease costs and incentivizes efficient spending by MA plans, among other overall benefits of provisions in the ACA. 
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