Putting a New Face on Medicare Advantage Beneficiaries

By James Gutman - May 4, 2012 Let it not be said that the health insurance industry is easing off the throttle in its campaign to save Medicare Advantage plans in the coming battles on what to cut when it's time to slash the federal budget deficit. The newest evidence of this campaign is a report put out by the America's Health Insurance Plans trade group May 3 showing the high proportions of minority groups and very low incomes among seniors who enroll in MA plans. In a wonkish sort of way, the study offers kind of a populist "MA beneficiaries are us" approach to defend the plans from anticipated future attempts to use MA as a piggybank for budget cutters. Specifically, the study uses data from CMS's own Medicare Current Beneficiary Survey (MCBS) to show that MA plans "were a vital source of coverage for low-income and minority beneficiaries in 2010," the most recent year for which data are available. The researchers found that while 26% of all Medicare beneficiaries were enrolled in MA plans then, 29% of African-American seniors and 36% of Hispanic beneficiaries were in MA. Moreover, 43% of beneficiaries in MA plans had incomes of $20,000 or less, compared with 39% of all Medicare beneficiaries. And among "active choosers," which are defined as beneficiaries not enrolled in Medicaid or employer-based supplemental coverage, 46% of those with annual incomes between $10,001 and $20,000 in 2010 chose MA plans, compared with 23% purchasing Medigap supplemental policies and 31% in just basic Medicare fee-for-service alone. What do you think of this kind of a campaign? Is it likely to be effective in convincing federal policymakers not to cut MA plan payments further by showing such cuts would disproportionately affect already disadvantaged seniors? Or has the train already left the station, and the only question is by how much will MA plans be cut in the next round of budget fixing?