Unions back proposed Medicare Advantage cut

The labor movement is throwing its weight behind a proposed cut to Medicare Advantage (MA) that is fiercely opposed by insurers, doctor groups and Republican lawmakers.

The AFL-CIO urged the Obama administration on Friday not to drop its proposed 2015 rate reduction, arguing the cut is necessary to rectify the funding imbalance between MA and traditional Medicare.

{mosads}”We believe it is in the best interest of today’s and future Medicare beneficiaries and American taxpayers to establish greater parity between MA plan reimbursements and traditional Medicare costs,” the federation wrote in a letter.

“We urge [Medicare] to stay the course and continue to implement Medicare Advantage policies enacted through the [Affordable Care Act].”

Announced late last month, the proposed reimbursement cut would shave at least 2 percent on average off funding for Medicare Advantage plans. It is expected to be finalized in rules due out April 1.

The union letter — also signed by a handful of senior and consumer groups — responds to a growing crescendo of attacks on the proposal from the insurance industry and Republican candidates.

America’s Health Insurance Plans is engaged in an intense lobbying battle to keep MA rates flat next year, and GOP campaign committees are eager to slam Democrats for what they see as a looming blow to seniors’ healthcare.

The proposed 2 percent reduction is the result of both ObamaCare and an annual rate update from the Centers for Medicare and Medicaid Services.

The healthcare law reduced the program’s funding by $200 billion over 10 years with the goal of reducing what critics call “overpayments” to Medicare Advantage.

Thanks to GOP-backed policies, MA receives more funding per patient on average than traditional Medicare.

The AFL-CIO and its peers said that cutting payments to MA will make Medicare’s budget more sustainable in the long term.

“The above mentioned policies are critical toss stabilizing the fiscal health of the Medicare program, and to ensuring efficient spending of taxpayer dollars,” the federation wrote.

Healthcare experts noted that while 2 percent represents an average cut across the board, each MA plan will experience a different reduction based on factors like quality and location.