AARP Reaction to Insurance Industry Report

Health reform can improve Medicare, limit insurance company subsidies

September 15, 2009 -- WASHINGTON—AARP Executive Vice President John Rother today responded to a report on hospital readmissions in the Medicare Advantage program by America’s Health Insurance Plans (AHIP). Rother’s statement follows:

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“AARP has long been a champion of improving care coordination, chronic disease management and prevention. That’s why we’re fighting for the kinds of health care reforms that this study advocates—like reducing avoidable hospital readmissions and providing better access to preventive care.

“AHIP’s analysis of hospital stays and readmissions reinforces the need for better follow-up care in traditional Medicare. We know from the nonpartisan Congressional Budget Office that reducing avoidable hospital readmissions could save more than $19 billion over the next ten years. That’s why we’re working to ensure a final health care reform bill adds a follow-up care benefit to traditional Medicare to help both patients and their family caregivers by keeping them healthy and out of the hospital in the future.

“Today’s report notes that many private Medicare plans already offer similar, money-saving services. Traditional Medicare should be strengthened with the addition of a follow-up care benefit that would achieve smoother transitions from hospital to home, which would both save money and improve care.

“We’re pleased that some insurers are providing these important services to their members. AARP believes that those Medicare Advantage plans that deliver high quality care should receive bonus payments. The use of bonus payments for quality performance has been endorsed by the Institute of Medicine and the Medicare Payment Advisory Commission as a powerful tool to improve the performance of our health care system and reduce variations in quality, and is a sound basis for future Medicare payment system reforms.

“We believe this study underscores the fact that private plans in Medicare can achieve savings without relying on billions in excess government payments. The savings available from eliminating costly and preventable hospital readmissions show clearly that MA plans should be able to compete based on the quality of care they provide, not on overly generous subsidies from taxpayers, which do little to help the majority of Medicare beneficiaries and drive up premiums for all.”

Source: AARP