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Biden’s Proposed Cuts To Medicare Advantage benefits: Here’s The Truth

Biden administration isn’t proposing cuts to Medicare Advantage benefits(Photo:

Many VERIFY readers have inquired as to whether the Biden administration plans to cut Medicare Advantage. Here’s why those assertions are incorrect.

Medicare benefit cuts have been a hot topic for US lawmakers in recent months.

Recent advertisements claim that President Joe Biden’s administration is proposing cuts to Medicare Advantage, also known as Part C One of the ads, which was shared on Twitter, claims that the cuts would eliminate benefits for individual members.

Many VERIFY readers have also asked if the Biden administration’s proposed Medicare Advantage cuts are true.


Is the Biden administration considering reducing the benefits of Medicare Advantage plans?


No, the Biden administration does not intend to reduce Medicare Advantage plan benefits.

The federal government has proposed changes to how Medicare Advantage insurance companies are paid, but those changes do not necessitate benefit cuts for enrollees.

Biden’s Proposed Legislation To Cut Medicare Benefits(Photo by Scott Olson/Getty Images)


Medicare is a federal health insurance program for people 65 and older, as well as some people under 65 who have certain disabilities or conditions. It is divided into four sections: A, B, C, and D.

The federal government’s traditional Medicare program includes Part A hospital insurance and Part B medical insurance.

Medicare Advantage plans, also known as Part C, are provided by private companies that have been approved by Medicare rather than the federal government. These plans will cover both Part A and Part B.

Most Medicare Advantage plans also include Part D prescription drug coverage and may offer additional benefits such as vision, hearing, and dental coverage that aren’t available through traditional Medicare.

According to some recent advertisements, the Biden administration is proposing “massive cuts” to Medicare Advantage, which could result in benefits being reduced by hundreds of dollars per retiree. The American Action Network, a conservative issue advocacy group, is funding at least one of these ads.

The claims about Medicare Advantage benefit cuts are most likely the result of two recent announcements from the Biden administration.

One is a rule change that, starting in April 2023, will allow the federal government to recover past overpayments to Medicare Advantage insurers. Second, the federal government recently proposed an update to how Medicare Advantage insurers will be paid beginning in 2024.

However, the Biden administration does not intend to reduce Medicare Advantage benefits for seniors, according to the U.S. According to experts from the Department of Health and Human Services (HHS) and Medicare.

The proposed changes are listed below.

Rule modification

The new rule will go into effect on April 3, 2023. It will alter the federal government’s auditing process for Medicare Advantage insurers, allowing it to recoup overpayments.

According to HHS and the Centers for Medicare and Medicaid Services, studies and federal government audits “have revealed that private insurance companies have charged billions of dollars in overpayments to Medicare Advantage plans” for diagnoses that were not supported by a patient’s medical record (CMS).

CMS is required by law to “ensure accurate payments and prevent fraud, waste, and abuse,” and audits are part of that process, according to HHS.

Other proposed changes would alter the way Medicare Advantage insurers are compensated.

In early February, the Centers for Medicare and Medicaid Services (CMS) issued an advance notice outlining the federal government’s proposals for paying Medicare Advantage plans in 2024.

While some of the proposed changes will result in lower payments to Medicare Advantage insurers, the Centers for Medicare and Medicaid Services (CMS) estimates that the overall effect of the proposed policies and other changes will be a 1% increase in payments to insurers per enrollee in 2024.

Because of this increase, HHS claims that the Biden administration “is not cutting Medicare Advantage payments.”

So, what effect do these proposed changes have?

Some would have an impact on Medicare Advantage’s risk adjustment model, which essentially determines how much the federal government pays insurers based on patient diagnoses.

The proposed changes would make the risk adjustment model “less generous to the plans,” according to Robert Berenson, M.D., a Medicare expert with the Urban Institute who supports the changes.

However, according to Berenson, the risk adjustment changes do not result in a reduction in benefits for enrollees.

“There will be fewer payments to health plans, but beneficiaries will not lose anything,” he explained.

It will be up to the insurance companies to decide.

According to Jeannie Fuglesten Biniek, associate director of the Kaiser Family Foundation’s Program on Medicare Policy, the changes should be viewed as “improving the accuracy of payments to Medicare Advantage plans,” rather than cuts.

According to some industry stakeholders, such as the Better Medicare Alliance, these changes will force insurers to reduce benefits or raise premiums for Medicare Advantage enrollees. However, Fuglesten Biniek believes that outcome is unlikely.

“The federal government is currently providing generous payments to these plans. “They have a lot of cushion,” she said. “In addition, they compete by offering plans with zero supplemental premiums [and] plans that have robust extra benefits. This is an appealing market for them to enter.”

Insurers can reduce administrative costs, marketing expenses, or profits before cutting benefits in order to remain competitive in the market, she added.

Read also: Social Security: Payment Cuts Off Up To 20% As Early As 2032

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