We're in an Election Year, and Joe Biden Has Decided to Cut Medicare Advantage Benefits

The Biden administration somewhat quietly announced cuts to next year's base payments to Medicare Advantage plans, adding concerns to an already unstable economic environment.

According to multiple reports, the administration will be decreasing that base pay by 0.16 percent, which may not seem like much, but it can have a big impact on enrollees.

What they're saying: "These policies will put even more pressure on the benefits and premiums of 33 million Medicare Advantage beneficiaries who will be renewing their coverage this fall," said Mike Tuffin, CEO of the insurer trade group AHIP.
What we're watching: Biden administration officials say enrollees' benefits should remain stable next year, but plan bids due June 1 could show scaled-back benefits and premium adjustments, said Duane Wright, a senior research analyst at Bloomberg.
"President Biden's team is gambling that MA beneficiaries won't realize before the election the benefits Biden's team is causing them to lose come January 2025," said Raymond James analyst Chris Meekins.

It's not the first time his administration has made the call to do it, and we've known for a while another round was coming. But now they've made it official.

The risk to costs under Medicare Advantage, which is used by upwards of 50 percent of Medicare-eligible seniors in the country, has plenty of people in the Democratic Party upset - and it's not just because the lobbyists are upset, either. As it turns out, there are a lot of people who normally vote Democrat who could be impacted.

Compared to traditional Medicare beneficiaries in 2021, Medicare Advantage enrollees were more likely to be Black or Hispanic, have incomes below $20,000 per person, live in urban areas, and have lower levels of education (Figure 3, Appendix Table 1). In addition, dual-eligible individuals account for a larger share of Medicare Advantage enrollees (22%) than traditional Medicare beneficiaries (16%).

Let me repeat that first bit for emphasis:

Medicare Advantage enrollees were more likely to be Black or Hispanic, have incomes below $20,000 per person, live in urban areas, and have lower levels of education

Now, the administration is trying to keep this quiet. There wasn't a big announcement, and the major media outlets haven't done a lot of major coverage of the incoming changes. But, as noted in a quote above, the potential changes to benefits could impact a lot of seniors who are up for renewal in the fall - right before they go to the polls to vote for president. And the current president, a man a lot of them supported, is trying to take away their benefits. That seems like an insane electoral strategy, but I'm not Team Biden.

As a conservative, sure, I like it when the government spends less, and I'm certain more than a few of you would champion more (responsible) cuts to entitlement spending. But... is no one at the White House paying attention here? Does no one understand you're cutting key benefits to your base in an election year?

Sen. Rick Scott of Florida understands. Florida has a huge retirement population.

"Biden’s war on seniors is disastrous – especially for seniors on fixed incomes who are already struggling with skyrocketing inflation," he said in a statement. "The takeaway from Biden’s actions is clear: Democrats don’t give a damn about the 2.8 MILLION Florida seniors enrolled in Medicare Advantage who will see costs go up by nearly $400 a year."

He understands that this will impact his constituents. The Biden administration clearly does not.