AHIP: Proposed 2024 Medicare Advantage Advance Notice Cuts MA Rates

AHIP is pushing back on the proposed 2024 Medicare Advantage advance notice because it presents a dramatic rate cut that would impact beneficiaries, Matt Eyles, president and chief executive officer of AHIP, said in a published statement.

“We respectfully disagree with the Secretary’s recent statements about the impact of the Administration’s proposed 2024 Advance Rate Notice for Medicare Advantage (MA),” said Eyles. “It will have real-world consequences in 2024 for the more than 30 million seniors and people with disabilities who choose MA—they will face increased costs and reduced benefits.”

According to AHIP, the Biden administration’s proposed advance notice would reduce average Medicare Advantage rates by 2.27 percent in 2024, primarily due to risk model changes and increasing benchmarks. The advance notice would also lower quality bonus payments by 1.24 percent.

Benchmarks would rise on average 2.09 percent. In comparison, benchmarks rose 4.88 percent in 2023. The low benchmark growth for 2024 could pose problems in covering Medicare enrollees’ costs, since the cost per Medicare enrollee is expected to rise 5.0 percent.

Eyles pointed to Medicare Advantage plans’ superior performance and costs. The cost burden for Medicare Advantage enrollees has been lower than in fee-for-service Medicare, with traditional Medicare beneficiaries spending on average over $1,600 more than Medicare Advantage enrollees in 2017. Eyles indicated that the proposed advance notice would jeopardize that track record.

“The Administration has stressed that protecting Medicare is a key priority. We agree, and so do the 30 million seniors who count on MA. That’s why we look forward to having meaningful conversations with the Administration about the impact of the Advance Rate Notice on seniors and people with disabilities to ensure they continue to receive the high-quality, affordable coverage and care they expect through their Medicare Advantage plans,” Eyles said.

Prior to making this statement, AHIP had published comments on the proposed rule for Medicare Advantage 2024 policy and technical changes.

HHS released a fact sheet that outlined the Medicare Advantage advance notice’s expected impacts. The department said it will not reduce Medicare Advantage payments but, rather, that 2024 Medicare Advantage payments would grow by one percent. Moreover, proposed overpayment audit policies will not lead to higher premiums or reduced benefits.

“Recovering these improper payments and returning this money to the Medicare Trust Funds will protect the fiscal sustainability of Medicare and allow the program to better serve seniors and people with disabilities, today and in the future,” the fact sheet explained.

The proposed 2024 Medicare Advantage advance notice targeted Medicare marketing schemes, access to care barriers related to prior authorization policies, and increasing access to behavioral healthcare. HHS noted that most of the largest health insurance companies have been scrutinized in court for fraudulent coding and that returning improper payments will preserve Medicare’s integrity.