ACHP: Current Medicare Advantage Benchmark Caps Penalize Seniors

The Alliance of Community Health Plans (ACHP) voiced its support for the Quality Payment Relief Act, which the organization argued would correct the use of Medicare Advantage benchmark caps and enable Medicare Advantage beneficiaries of all geographical regions to use the full scope of their benefits.

When the Affordable Care Act first went into effect, it instituted a way to cap Medicare Advantage spending through setting new benchmarks. The benchmarks were intended to take into account the fee-for-service Medicare spending in the Medicare Advantage plan’s geographic region.

“The Affordable Care Act (ACA) created a new formula for setting MA benchmarks to create geographic equity based on average traditional FFS Medicare spending,” the ACHP fact sheet explained. 

“Congress did not intend for the QBP to be included in the benchmark cap calculation. Unfortunately, HHS has interpreted the statute to require the QBP be included in the benchmark before the comparison to the pre-ACA rate is made.”

As a result of this interpretation, ACHP stated that some Medicare Advantage beneficiaries are not able to access the full scope of their benefits and may see higher out-of-pocket healthcare spending than their counterparts in other regions of the country.

The fact sheet shared the estimated annual benefits lost per senior for four counties in four different states to demonstrate the variation of consumer experience in the current system and the significant financial impact that the current interpretation of the law can have.

In the Imperial county in California, seniors did not have access to approximately $1,860 in benefits. In Curry, New Mexico, seniors lost $1,740 in inaccessible Medicare Advantage benefits. Beneficiaries in Vermon, Wisconsin lost $1,482 and those in Mower, Minnesota lost $1,459 because of the current benchmark system, the ACHP fact sheet indicated.

Seniors already have a hard time covering their Medicare out-of-pocket healthcare costs. Overall, seniors in Medicare express anxiety about high healthcare costs. A third of all senior respondents in a MedicareGuide.com survey shared that health insurance bill was their most expensive bill. 

The costs may be lower for Medicare Advantage beneficiaries, particularly for those in Medicare Advantage health maintenance organizations, but the fact remains that seniors are financially burdened with healthcare costs.

The Medicare Advantage Quality Payment Relief Act is a brief bill that seeks to remedy the issue by changing four words in the Social Security Act. By changing the phrasing, the bill’s co-authors—Representatives Ron Kind (DWI), Mike Kelly (R-PA), Mike Doyle (D-PA), and Brett Guthrie (R-KY)—aim to rectify what experts at ACHP consider a misinterpretation of the law.

“The QPRA builds on the success of the MA program by fixing the flawed benchmark calculation that currently penalizes seniors enrolled in high quality MA plans,” the ACHP fact sheet stated. “The bill will remedy the unintended consequence of current law and ensure that seniors have access to expanded benefits, reduced premiums and/or lower co-pays.”

ACHP listed out multiple advantages for seniors if the benchmark cap changes according to the Quality Payment Relief Act. The small change might enhance Part D benefits and over-the-counter benefits, enable access to fitness memberships and hearing aids, and address social determinants of health through nutrition and transportation programs.

Entities apart from ACHP have also voiced concerns about the current benchmark system. For instance, in 2019 MEDPAC’s annual report to Congress identified problems with the quality bonus program. MEDPAC sought to replace the program altogether by implementing a new set of quality measures for the Medicare Advantage Star Ratings system.

Any flaws in the system may become even more evident in 2021 and 2022 as the healthcare industry continues to grapple with the coronavirus pandemic and its fallout.