CMS Reverses Medicare Advantage Cuts

For the third year in a row, Medicare Advantage will receive a payment increase in 2016 instead of proposed cuts.

For the third year in a row, Medicare Advantage will receive a payment increase, avoiding a proposed cut, the Obama administration announced Monday.

A payment raise of 1.25 percent is a reversal of the .9 percent cut announced February. The change, according to the Centers for Medicare and Medicaid Services, is because of updated Medicare spending estimates. Medicare Advantage plans are administered by private insurers as an alternative to traditional Medicare.

Almost 300 lawmakers signed letters written to CMS separately by the House and the Senate after February's announcement urging the agency to reverse the cuts. The insurance industry also lobbied against them.

MA has hit a record high enrollment each year since the Affordable Care Act was passed in 2010, increasing by 42 percent. It now serves 16 million people, and nearly 30 percent of Medicare beneficiaries are enrolled in an MA plan.

Premiums have fallen by almost six percent since 2010, and more than 90 percent of Medicare beneficiaries have access to a Medicare Advantage plan for which they do not have to pay a premium, according to CMS.

Other changes announced Monday include updates to the star rating system used to assess the performance of plans, a commit to further study the relationship between dual-eligible or low-income status enrollees and performance, and improvements to information available to enrollees regarding plan networks.