It looks like Massachusetts -- especially minorities in Boston and Chelsea (Suffolk County) who depend disproportionately on Part C -- got hit hard by the Obama administration's 2015 cuts to public Part C health care plan capitation fees as mandated by the Patient Protection and Affordable Care Act (PPACA) of 2010 as amended. These are the so-called Obamacare cuts to Medicare Advantage. In theory, as the capitation fee gets cut, the premiums increase.
Similarly in California, Kevin Knaus reports year over year capitation fee cuts.
It's too soon to see how these will actually affect public Medicare Advantage health plan beneficiaries across the country. But first out of the gate, MVP -- a very highly regarded non-profit Medicare Advantage plan administrator in upstate New York and Northern New England -- has already reacted to the draconian PPACA cuts in dramatic fashion that will be devastating across cow country. MVP is just a single data point of course; who knows if perhaps in previous years it had been underpricing to build market share. But MVP blames PPACA. And a Part C plan for Georgia state retirees has also been cut providing no competition for AARP from which these seniors can choose. (I will update this information as it appears but there are likely to be as many as 3000 similar press releases because Part C Medicare Advantage varies nationwide by county.)
In Massachusetts (see image), on an apples to apples basis1 -- comparing plans that would have received no bonus this year and would receive none next year -- it looks like the capitation fee cuts are as high as 7% in Boston (and Chelsea) with no cut in the Berkshires. If nothing else changed (it always does), premiums would increase by those amounts. Because all leading Massachusetts insurers participating in Part C are good enough to receives a bonus, I also tried to compare a 2014 4-star plan to a 2015 mid-level quality plan. (Springfield's Health New England is one of the top 20 plans in the country so its beneficiaries should do the best in the state.). No matter how you look at the data, the cuts will likely be bloody because the worst capitation rate2 in 2014 is still better than the best in 2015.
It is hard to see how the Massachusetts plans would not all show some of the devastation already seen in Atlanta GA, Lebanon NH, Burlington VT, Schenectady and Rochester NY because -- like MVP -- the Massachusetts insurers involved in Part C are all non-profits. Blue Cross of Georgia is part of Indiana-based Wellpoint, which also runs Original Medicare claims and payments activity in many states.
1It's hard to compare 2015 with 2014 because as usual the Federal government changed formats in how it presented the final county by country capitation fee amounts1. And capitation-fee cuts do not automatically mean the affected insurers -- primarily Blue Cross, Fallon, Health New England and Tufts (and to a much lesser degree Harvard) in Massachusetts -- will raise premiums proportionately. They may also reduce benefits, raise co-pays or raise the annual out of pocket (OOP) spending limit, or do a combination of all of the above.
2The Obama administration formatting -- perhaps intentionally -- is so confusing that perhaps I have it bass ackwards. But I don't think so. Also, as I have posted often, I believe the differences between per-person Part C captiation fees and traditional fee for service per-person average payments should be equal. But these cuts -- if they translate proportionally -- will probably put Part C enrollees back at the disadvantage they suffered prior to 2005.
Comments