Originally Posted by donheff
IIRC Medicare Advantage programs got a 14% subsidy that was supposed to be transitional but didn't end. I think ACA finally cut it off. This is separate from the provider payment level.
Agree that MA changes with ACA are separate from provider payments.
According to this CMS report, through 2016 ACA is projected reduce "excessive MA payments" by $65 billion and "reform" (reduce) Medicare provider payments by another $85 billion.
But higher Medicare Advantage insurance costs (8-13%) result not from a predetermined % "subsidy" but from a calculation of per capita (per Medicare recipient) carrier payments are based on certain regional benchmarks. The reasons for higher overall per-person costs of MA remain controversial (e.g. sicker population?, better care delivery?, overutilization of services?, waste?, etc.). Regardless, provisions of ACA are intended to reduce this higher cost of MA (vs traditional Medicare) as part of an effort to control overall Medicare spending.
Medicare Advantage: Facts, Fallacies, And The Future – Health Affairs Blog