Medicare Advantage Here to Stay? Danielle Kunkle 2011-04-23

An announcement by the Obama administration this week appears that it will delay funding cuts to Medicare Advantage plans, at least for the short term. The healthcare legislation passed last year original scheduled nearly $150 million in cuts to the popular private healthcare plans, causing grave concern among the 26% of Medicare beneficiaries who have chosen this type of plan for their personal coverage. Originally the cuts were to be achieved by rewarding only those plans that achieved the highest quality ratings with bonus payments each year. It was widely believed that this would cause drastic cuts in benefits and  higher out-of-pockets costs for Medicare beneficiaries enrolled in plans ranked than superior.  Some analysts had even speculated that the funding system would result in the closure of some plans across America. However, the administration's recent announcement has maintained over $6.5 billion dollars in funding for the plans, even those that receive only a score of average on their quality ratings. While senior citizens will likely be happy about the preservation of their Medicare options for the short term, there is still considerable concern about whether this change will preserve plans for the long-term or whether it is simply a political move designed to delay the cuts until after the 2012 elections. The bonus money will only be awarded through 2014. Unless additional changes are made, the original cuts as outlined in the Patient and Provider Affordable Care Act will resume in 2015.