April 3, 2023
Payers | Tea Leaves
  • The Centers for Medicare and Medicaid Services (CMS) announced Friday that it will phase in controversial changes to the Medicare Advantage risk adjustment model over three years. The Biden administration wasn’t persuaded by the insurance industry and other health care groups that its proposed changes, including the removal of more than 2,000 diagnoses from the risk adjustment model, would hurt beneficiaries, but CMS gave insurers a concession by choosing to phase in the policy rather than changing the risk adjustment model all at once. CMS estimated in its final 2024 Medicare Advantage rate notice that insurers will see an average 3.32 percent payment increase, or $13.8 billion, next year. (Articles here, here, and here)
  • A new report predicts that the Medicare fund will run out by 2031 and Social Security will be depleted by 2033 without congressional action. Medicare recipients would face automatic benefit cuts and Social Security would not be able to make full retirement payments starting unless Congress intervenes. This latest yearly forecast serves as a warning of the fragile financial health of the federal government’s two most expensive programs, which tens of millions of seniors depend on for medical care and retirement benefits. (Articles here, here, here, and here)