Private Medicare Advantage Fee-for-Service Plans Under Review

Chair Pete Stark (D-Calif.) said that Medicare Advantage plans are at the top his list for proposed reductions in Medicare reimbursements to fund an expansion of SCHIP. Medicare reimbursements for MA fee-for-service plans on average are 19% higher than those for traditional Medicare for equivalent benefits, and critics have said that sales agents often misrepresent the plans to enroll beneficiaries

Representatives from the Center for Medicare and Medicaid Services (CMS) testified that the MA fee for service plans tend to locate in areas where Medicare Advantage plans have not traditionally been available. CMS reps also stated that MA plans are attractive to employers and unions throughout the country because they can readily provide coverage nationwide, including coverage that is adaptable to seasonal changes in residence. Recently the AMA released a survey which showed that physicians polled for the survey said that more than 50% of their patients who enrolled in MA plans were denied coverage for services covered by traditional Medicare. In addition, physicians said that 84% of their patients who enrolled in MA plans did not understand the plans. According to the survey, 51% of physicians said that reimbursements provided by MA plans are lower than those provided by traditional Medicare.