"The Good, the Bad and the Ugly" by Eric H. Schultz

There’s serious discussion in Washington around national health care reform. That’s a good thing because our current system produces inadequate clinical outcomes at an unsustainable cost. And, while the devil is most definitely in the details when it comes to health care reform, there’s growing consensus and a commitment among key stakeholders to take meaningful steps toward a solution.

There also is serious discussion around reducing funding to Medicare health plans (known collectively as the Medicare Advantage program) as a strategy for funding some of the national health care reform measures. For Massachusetts Medicare beneficiaries, that’s a bad thing.

As in so many things, Massachusetts was a pioneer in the Medicare program when it was among the first states to offer a health plan option to seniors. Today, Medicare Advantage is popular in the Commonwealth. Approximately 190,000 seniors (about 20% of all residents on Medicare) are enrolled in the program. There are good reasons for this popularity. These plans are high quality and low cost. And, the Massachusetts Medicare Advantage plans are ranked among the top health plans in the country by the National Committee for Quality Assurance for clinical quality and customer satisfaction.

According to statistics from the Henry J. Kaiser Family Foundation, most Medicare Advantage enrollees are lower income seniors (with incomes reported between $10,000 and $30,000).

They can’t afford traditional fee-for-service plans, which have higher out-of-pocket costs and less rich benefits than many of the Medicare Advantage plans. Seniors with higher incomes frequently purchase private insurance plans to augment their traditional Medicare fee-for-service plans.

For more than 30 years, seniors have appreciated the choice, benefits and high-quality, coordinated care provided by Medicare Advantage plans and their contracted hospitals, physicians and other providers. Enrollees typically have several plans to choose from, with varying premiums (Fallon Community Health Plan offers Medicare Advantage plans with a $0 premium). Medicare Advantage plans also have benefits and services that are not covered by traditional fee-for-service plans.

Perhaps the greatest benefit of being enrolled in a Medicare Advantage plan is the coordination of care members receive. Care coordination results in reducing costs and improving quality and health outcomes. Massachusetts Health Quality Partners has shown in a recent study that, on certain clinical quality measures, Massachusetts seniors enrolled in a Medicare Advantage plan receive better care than those in traditional fee-for-service plans.

So what’s the ugly part? Cost shifting.

Medicare Advantage enrollees will be faced with higher premiums and/or reduced benefits. Since many of these enrollees are on fixed incomes, any adjustments to their social security and/or pension benefits will be insufficient to cover their increased health care expenses.

Providers will be faced with receiving a lower reimbursement for Medicare services and will seek to recoup these reductions from employers and patients that are commercially insured. This cost shifting is significant and has been occurring for several years.

FCHP has been participating in the Medicare program since 1980. We were one of the first health plans in the country to receive a contract. It’s a history and partnership we’re proud of and committed to continuing. We also have a unique position in that we have experience financing and delivering care across a variety of products – Medicare, Medicaid, PACE (Program of All-inclusive Care for the Elderly) and commercial insurance (including Commonwealth Care).

If Congress decreases funding to Medicare Advantage, it will seriously erode a benefit for thousands of seniors in Massachusetts – and those that can least afford premium increases and increased out of pocket expenses. Now more than ever, it’s important to keep health insurance affordable for everyone, including our seniors.

Eric H. Schultz is the president and CEO of Fallon Community Health Plan.