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Medicare "Advantage" Could Mean Disadvantage for NY Seniors

December 4, 2007

Albany, NY - A U.S. Senate committee faces a major decision soon that could limit healthcare options for 2.8 million New Yorkers. At issue is a pending 10 percent cut in Medicare payments to doctors, which some say should be headed off by reducing payments to insurance companies instead. The cut would take effect in January.

If that happens, says Neal Lane, a member of the American Association of Retired Persons' (AARP) Executive Council, it would limit the number of doctors available to help New York seniors and others on Medicare. Lane believes Senators should cut "excess payments" that insurance companies receive to run the Medicare Advantage plan, rather than cutting payments to doctors.

"That is absolutely the wrong thing to do; we need increasing access to good primary care for older adults."

Insurers say the payments they receive are in line with the services they provide, but the Congressional Budget Office reports they're paid 12 percent more than the cost of care.

Dr. Wayne Hannan, who practices in Wayne County and is vice president of the Medical Society of the State of New York, says Senators need to choose between helping insurance companies, and helping New York seniors and the poor who can't afford their medical bills.

"The issue is reaching a crisis point. We're just one month a way from when this formula will devolve into a 10 percent payment reduction, and that's going to have a very serious impact on seniors' access to healthcare."

Insurance companies argue they need the 12 percent additional reimbursement to administer the Medicare Advantage Plan, but the AARP's Neal Lane says it's excessive when you look at what patients get.

"I have not seen any evidence whatsoever that the outcomes for the consumer within Medicare Advantage Plans are any better than the traditional Medicare fee-for-service plans, so we're paying a premium of 12 percent for essentially the same outcome."

The issue will be before the Senate Finance Committee this week. The AARP is calling on Finance Committee member Sen. Charles Schumer (D-NY) to protect Medicare beneficiaries' access to doctors, and to strengthen assistance for low-income New Yorkers.

Michael Clifford/Kevin Clay, Public News Service - NY