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Medicare Advantage plan may have bipartisan appeal

Feb 21, 2024
Illustration of a gloved hand holding a scalpel over a hundred dollar bill

Illustration: Natalie Peeples/Axios

Paragon Health Institute, a right-leaning think tank led by a former Trump official, is proposing a plan that would cut Medicare Advantage spending by $250 billion over a decade, or 3.3%.

Why it matters: The plan, provided first to Axios, was developed with input from a group of health wonks across the ideological spectrum, and its measured proposals contrast with more sweeping approaches to overhaul both MA and traditional Medicare.

The big picture: The proposal, authored by Paragon Health's Joe Albanese, is being released amid growing criticism of MA's cost to the federal government and some of the practices insurers employ, like prior authorization.

  • But Albanese takes a decidedly pro-MA tone, framing it as a positive free-market alternative to the fee-for-service program and as ultimately having the potential to reduce government spending on seniors' health care.
  • MA "offers higher value care, more competition, and enhanced patient choice and is therefore an ideal vehicle for Medicare reform," he writes.
  • The paper's proposals aim to address flaws in MA's financing, and in doing so chip away at Medicare's broader problems.

What they're saying: "There will be quibbles with individual proposals in their paper, but certainly there's much in here with bipartisan appeal (and bipartisan opposition, as Congress hasn't shown much willingness to limit MA overpayments since the ACA's passage)," said the Brookings Institution's Loren Adler in an email.

  • "$250 billion is a big chunk of change and in the current political environment a huge political lift," said Josh Gordon, director of health policy at the Committee for a Responsible Federal Budget.
  • "When people talk about huge deficits over the long term and then point the finger at government health care programs, there is no way to address those huge deficits without including MA in any policy prescription," he added.

Between the lines: Unlike some other Medicare and MA reform plans, the Paragon vision doesn't include sweeping changes to either program.

  • The plans' goals are to "achieve greater overall parity between FFS and MA and remove restrictions on MA's operations while converting the program's relative efficiency into budgetary savings that are reflected in scorekeeping," it states.

Details: The plans' biggest components include changes to how MA benchmarks are calculated — a provision that would actually cost the federal government more money — as well as capping those benchmarks, ending quality bonuses and tweaking the risk adjustment process.

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