Curb Medicare Advantage Funding, Sen. Warren Asks CMS

The Centers for Medicare and Medicaid Services office, part of the U.S. Department of Health and Human Services, stands in Woodlawn, Maryland, U.S. Photo: Jay Mallin/Bloomberg

A coalition of 10 U.S. senators is asking the Biden administration to be tough on the Medicare Advantage program in 2025.

Sen. Elizabeth Warren, D-Mass., and nine colleagues are urging Medicare managers to save about $100 billion of the $400 billion they spend on the Medicare Advantage program each year by tightening the rules for how the plan issuers rate the health of plan participants.

"We dispute claims that such efforts could result in higher premiums or reduced benefits," Warren and her colleagues write in a public letter addressed to Xavier Becerra, the Health and Human Services secretary, and Chiquita Brooks-LaSure, the administrator of the Centers for Medicare and Medicaid Services.

Warren and her colleagues wrote in response to the preliminary CMS Medicare Advantage and Medicare Part D prescription drug plan rate announcement for 2025. The advance notice is part of the Medicare plan bidding process. CMS said it will post the final rate notice by March 31.

What it means: In some cases, opposition to the Medicare Advantage program in the Senate could complicate efforts to pass health finance legislation there.

But the Medicare Advantage program still appears to have strong, bipartisan support in the Senate.

In January, a Nevada Democrat, Sen. Catherine Cortez-Masto, helped lead a team that sent CMS a letter asking for stability for the program.

The list of the 60 signers of that letter included 18 Democrats and two independents who caucus with the Democrats. One of the Democrats who signed that letter was Majority Leader Chuck Schumer of New York.

Medicare Advantage: Because of the nature of the federal legislation that created Medicare, original Medicare coverage exposes enrollees to many deductibles, co-payment requirements and coinsurance bills.

About 14 million of the 67 million Medicare enrollees fill in the gaps by buying Medicare supplement insurance, which is under the jurisdiction of state insurance regulators.

Roughly 33 million use private insurers' Medicare Advantage plans to provide what looks like an alternative to original Medicare. Plan managers fill in most of the original Medicare "cost sharing" gaps in exchange for encouraging enrollees to use in-network providers and let the plans manage the enrollees' use of care.

Some health insurance agents dislike the Medicare Advantage program because they believe that the private plans' care management efforts were too tough on the enrollees and because they disliked the program marketing enrollees.

Those would prefer to see consumers sign up for original Medicare and Medicare supplement insurance.

The Medicare Advantage annual enrollment period for 2025 is set to run from Oct. 15 through Dec. 7.

The Warren coalition: In addition to Warren, the senators who signed the new letter include Bernie Sanders, a Vermont independent who caucuses with the Democrats, and eight Democrats: Sherrod Brown of Ohio; Richard Durbin of Illinois; Peter Welch of Vermont; Jeffrey Merkley of Oregon; Cory Booker of New Jersey; Richard Blumenthal of Connecticut; Edward Markey of Massachusetts; and Tina Smith of Minnesota.

The senators asked CMS to get better data on Medicare Advantage program performance; do more about Medicare plans' medical care coverage preauthorization program red tape and care coverage denials; crack down on deceptive plan marketers; and stop insurers from getting more Medicare payments by making enrollees look sicker than they really are.

The senators cited the Committee for a Responsible Federal Budget as the source for the estimates that keeping the enrollees from looking sicker than they are would save about $100 billion per year.

Other perspectives: Medicare Advantage program supporters at America's Health Insurance Plans and the Better Medicare Alliance have argued that CMS needs to do more to improve payments for 2025, not try to squeeze cash out of the program.

CMS indicated in the advance notice that care costs have grown about 2.44%, but care costs actually increased about 7% in 2023, according to AHIP.

Public comments on the advance notice were due March 1. At press time, some of the comments were starting to show up on the federal government's Regulations.gov website.

The Centers for Medicare and Medicaid Services offices in Woodlawn, Maryland, U.S. Photo: Jay Mallin/Bloomberg