Politics

Study: Cuts to Medicare Advantage Top $1,500 Per Senior

Analysis says Obamacare cuts will affect all beneficiaries.

By Sam Baker and National Journal
BALTIMORE - APRIL 5: Nurse Coordinator Lisa Chrisley (R) injects an experimental flu vaccine into the arm of volunteer Kwisa Kang of Mt. Washington, Maryland, a medical school researcher, during a clinical trial to test the effectiveness of the vaccine to combat avian influenza April 5, 2005 at University of Maryland School of Medicine in Baltimore, Maryland. The trial aims to find out if the vaccine can protect people from a lethal avian flu strain, also known as H5N1, which was first detected in chickens and other birds in Hong Kong in 1997, claiming the life of a three-year old boy. There have been at least 69 more confirmed cases with 46 deaths since then, mostly in Vietnam and Thailand. University of Maryland School of Medicine was one of three U.S. sites that took part in the trial funded by the National Institutes of Health. (Photo by Alex Wong/Getty Images) (National Journal)
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Obamacare's Medicare Advantage cuts will lead to benefit reductions of about $1,500 per beneficiary, according to a new analysis from a conservative think tank.

The American Action Forum, founded by former Congressional Budget Office Director Douglas Holtz-Eakin, said almost all Medicare Advantage beneficiaries will feel the effect of cuts to the program.

The federal Medicare agency recently backed off a proposal to make additional cuts to Medicare Advantage — the second year in a row it has proposed and then abandoned such reductions. But the AAF analysis says the reductions mandated in the Affordable Care Act will still affect benefits for most seniors who use the program.

Roughly 30 percent of Medicare beneficiaries — about 16 million seniors — use the privately administered Medicare Advantage plans. The program continues to grow, despite the Affordable Care Act's cuts. Enrollment rose in 2014 to 15.9 million — roughly a 9 percent increase from the year before, according to a recent analysis from the consulting firm Avalere Health.

According to AAF, though, seniors who use Medicare Advantage are facing an average benefit loss of about $1,500 per year compared with pre-Obamacare rates. From 2014 to 2015, the average cut is about $300, or 3 percent.

The effects vary by state. Some, such as Alaska, will see slight increases in payments to Medicare Advantage plans, while others, including Louisiana, will face higher-than-average reductions.