Prevent Medicare’s ‘Pandemic Penalty’ on Seniors

by Jim Martin

The COVID-19 pandemic has hit seniors particularly hard. While no one is spared the risks of this virus, nearly three out of four deaths involve patients over age 65, many of whom also have one or more underlying medical conditions. 

But it is not just exposure to COVID-19 that threatens seniors. There is also a threat to seniors’ future health benefits if the Centers for Medicare and Medicaid Services (CMS) does not adjust its payment formulas for Medicare Advantage in response to the pandemic’s impact on health care.

More than 24 million Americans choose Medicare Advantage (MA) plans because of their comprehensive and cost-effective approach to providing care. Each year, CMS is required by law and regulation to decide how much it will pay MA plans, known as the “MA rate notice,” based on the medical experience of the prior year. This is a sensible approach that helps ensure that the health status and utilization of medical services by seniors is reflected in subsequent rates.

The MA rate notice is finalized early in the year so that Medicare Advantage plans have time to submit their bids for the following year. Unfortunately, the April 6 rate notice this year, which was issued at a time consistent with historic practice, came at the height of the COVID-19 pandemic. Why does this matter? 

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