Statement On Medicare Advantage

Statement from Scott P. Serota, president and CEO, Blue Cross and Blue Shield Association

April 11, 2007

WASHINGTON - The Blue Cross and Blue Shield Association (BCBSA) applauds Chairman Baucus and ranking member Senator Grassley for convening today's balanced and informative Senate Finance Committee hearing to examine the Medicare Advantage (MA) program.  More than 8.3 million Americans - many of them low-income and minority beneficiaries - rely on the coordinated, comprehensive coverage that MA provides.

Beneficiaries highly value the coverage they receive through MA, including coordinated healthcare and lower out-of-pocket costs.  Today, all people with Medicare have the option of enrolling in a MA plan.

In the last few years the MA program has been cut by $13 billion - resulting in annual payment increases below medical inflation.  Further cuts will result in a crisis for beneficiaries.

Ultimately, the issue is about the need to provide seniors with reliable and secure healthcare coverage.  Emory University Researcher Kenneth Thorpe, Ph.D., estimates that proposed funding cuts will result in 3 million people losing their MA coverage.  Furthermore, those most hurt by cuts will be low income and minority beneficiaries.  In a 2005 report commissioned by BCBSA, Dr. Thorpe found that more than 35 percent of Medicare eligibles with incomes below $10,000 without Medicaid or employer coverage enroll in MA, and 40 percent of African American and 53 percent of Hispanic beneficiaries without Medicaid or employer coverage are enrolled in MA.

Reduced funding for MA likely will result in millions of Americans experiencing increased premiums, reduced benefits, or no access to a MA plan at all.  Our seniors deserve better.