Most of us are not particularly familiar with the Biden Administration’s Inflation Reduction Act, but its provisions have come home to roost for more than a million people just recently. While most media outlets are covering the IRA’s impact on insulin and other drug prices in a positive way, another effect of the Act was a tiny reduction in reimbursement rates for certain Medicare Advantage plan providers.
Plan providers live and die based on government reimbursement rates, and any time there’s a reduction, the ripple effects show up for people who use the plans. In this case, certain providers have chosen to exit markets entirely, leaving whole counties without any Medicare Advantage plans whatsoever. Lest you think this means the providers are just being greedy, be aware that, like bank regulators who insist that banks make a profit to remain healthy, so do government health regulators insist that providers make profits so they can stay in business. Unfortunately, these goals of lower reimbursement rates and maintenance of profits are not compatible.
Most of the affected counties are in some of the poorest areas of the country, so while this may not affect you this time around, it pays to keep a close eye on the health of your plan provider. Let us know if you have any questions.
