In light of recent proposals for 2014 Medicare Advantage (MA) payment cuts, actuaries at Oliver Wyman have assessed the impact of cumulative reductions for MA beneficiaries. This response, commissioned by America's Health Insurance Plans (AHIP), predicts how the decreased reimbursement to Medicare Advantage Organizations will affect MA beneficiary premiums and benefits, and MA enrollments and viability.

With an estimated 6.9% -7.8% decrease in reimbursement to Medicare Advantage Organizations, the actuaries at Oliver Wyman predict negative effects for all Medicare Advantage recipients- to varying degrees.

What factors into this 6.9% - 7.8% decrease for Medicare Advantage Organizations? Beginning in 2014 under the Affordable Care Act (ACA), there will be an annual fee on the health insurance sector; this extends to private plans participating in public programs- including MA plans. The fee in 2014 will be approximately $8 billion, and will increase steadily until it is almost double in 2018. The National Per Capita Medicare Advantage Growth Percentage (NPCMAGP) is projected to be -2.3% for 2014. Benchmark reimbursement based on per-capita fee-for-service spending is estimated to reduce MA plan payment by a further 2.5%. The Centers for Medicare and Medicaid Services (CMS) has also already reduced payments by approximately 3.41% as a "coding intensity adjustment". This "coding intensity adjustment" is projected to decrease payments by a further 1.5% in 2014. Although some of these drawbacks are offset by bonus payments to Medicare Advantage Organizations for highly-rated plans, there will still be a decrease in payments in 2014, and at a time that medical costs are projected to increase by 3%.

What impact will this decrease have for MA beneficiaries? It is probable that Medicare Advantage Organizations will partially make up for this loss by reducing benefits. It is possible that service areas will be reduced (and possibly even dropped), provider networks will be reduced, and benefits will be more limited.

Furthermore, monthly premiums will have to be raised by between $50 and $90 per member, and there will likely be increased beneficiary cost-sharing. However, the impacts presented by Oliver Wyman are estimated averages; these cuts may impact individuals and people in different locations to varying degrees. It is projected that those with the lowest income and those who utilize the most services will be most adversely affected.

Dear readers,

I am now checking up from jolly ol' England, where I am spending a semester abroad at the University of Nottingham. I am taking classes in Philosophy of Mind, Philosophy of Religion, Underwater Archaeology, Introduction to Judaism, and Origins and Rise of Aegean Civilisation (with a "s" instead of a "z"). Classes are fun and challenging simultaneously... and of course stressful. I think the differences in how classes are operated are what I find most stressful. To begin with, the final grades for most of my classes are based on only two things: either one essay and one essay-format exam or two essays. In Underwater Archaeology, the entire class grade is based on one exam. Also, a grade of 70 or above is essentially an A+. I am working hard, doing my best, and can only hope from here that I get good results.

However, I find life here more interesting than the classes. I cannot count how many times I almost got run over the first week I was here in Nottingham because I looked the wrong way to see if cars were coming. Whenever I drive somewhere with anyone else, I feel like I should be driving, sitting on the left side. My new friends found it ridiculous how excited I was the first time I sat on the top of a double-decker bus. Most people in the U.S. drive to the supermarket for groceries; I and most other people I've met walk there. Transportation is amazing here; bus routes seem to go everywhere, and one can travel (fairly inexpensively) almost anywhere in England by train. I find it quite amusing when my friends mention how far one place is from another, and I point out that my state is bigger than their country.

I have not yet travelled anywhere outside of Nottinghamshire, but soon will. I will soon visit a friend who lives near Birmingham, and together, she and I will hopefully also go to Cardiff and/or York. I also intend to go to London, Paris, and maybe Madrid after exams end.

Favorite things about England: public transportation, tea selections, accessibility of stores, accents, lack of poisonous animals, more affordable Nutella, socialized medicine

Least favorite things: differences in spelling, unpredictable weather, lack of good Mexican food, dollar-to-pound exchange rate, confusing word switches

One of the things I do like about the U.K. is the fact that it has socialized medicine (although only being here for a few months, I cannot take advantage of it). Universal healthcare is a very controversial issue in the United States, but having been here for two months now, I do not find it nearly as bad as many think it to be. Regarding standard doctor's appointments, nobody I have met has ever had a problem getting one. From what my friends say, necessary operations are not wait-listed; they take priority and are done as soon as possible. In general, it seems good that people get treatment without deductibles, and can get prescription medications either for free or for small fixed fees. One need not worry about whether or not a doctor is in-network. I personally find it logical and preferable to our current healthcare situation with a multitude of insurance companies and private doctors.

I hope to be able to give another update at the conclusion of my trip!

 Sincerely,

 Jessica Goodman

 Guest writer, AH Insurance Services