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Flawed Analysis Exaggerates How Health Reform’s Medicare Advantage Savings Will Affect Enrollees

Insurers and others who oppose the health reform provisions that scale back Medicare Advantage overpayments often imply that the payment reductions will mean a dollar-for-dollar benefit cut for Medicare Advantage enrollees.  That’s exactly what the American Action Forum (AAF) did last week when it issued a flawed analysis substantially overstating health reform’s impact on Medicare Advantage enrollees.

But as we have previously explained, recent research challenges this claim, finding that before health reform, most of the Medicare Advantage overpayments were not passed through to enrollees.  Insurers thus can still provide additional benefits to attract enrollees if they trim profits and become more efficient.

Moreover, by curbing overpayments to Medicare Advantage plans, the Affordable Care Act lowers premiums for all Medicare beneficiaries and extends the solvency of Medicare’s trust fund.