Jayapal Laments Biden's Cave to Insurance Industry on Medicare Advantage

Noting that progressives in Congress recently helped lead the White House to the brink of implementing far-reaching reforms to Medicare Advantage and bringing relief to taxpayers who for years have been overpaying insurers that run the program, Rep. Pramila Jayapal on Thursday criticized the Biden administration's plan to delay making changes to the system following aggressive lobbying by the insurance industry.

"We were on the cusp of immediate reform when the Biden administration proposed fixes to stop price gouging by insurance companies," said the Washington Democrat, who chairs the Congressional Progressive Caucus (CPC). "Sadly, health insurance companies used taxpayer dollars meant for medical care to instead buy Super Bowl commercials and desperately lobby to stop these changes that would cut down on their profiteering."

As Common Dreams reported, the Biden administration announced last Friday that instead of immediately introducing updates to the Medicare Advantage risk adjustment model, which determines a patient's predicted use of healthcare services and how much the federal government will pay an insurer to cover the costs, the Centers for Medicare & Medicaid Services (CMS) will phase in the changes over three years.

"It is now clear that Medicare Advantage is simply a profiteering venture that hurts patient care. Without a complete overhaul, it will be impossible to stop bad actors."

The administration backed away from plans to implement the changes all at once after insurers which participate in Medicare Advantage—and their Republican allies in Congress—claimed the updates would result in higher premiums for beneficiaries. The lobbying campaign came after numerous audits, academic studies, and reports showed that the Medicare trust fund was drained of about $11.4 billion in overpayments to Medicare Advantage in 2022.

Jayapal noted that pressure from the CPC pushed the Biden administration to pursue changes to the Medicare Advantage risk adjustment system and address rampant fraud, but said "there is an incredible amount of work left to do to ensure seniors and people with disabilities in Medicare are protected from the greed of health insurance companies."

"The administration must refuse to be bullied by health insurers, and instead must side with patients when deciding future policies. These policies can mean life or death for Medicare beneficiaries," she said.

The CPC chair also reiterated that the Biden administration should implement changes the caucus demanded in the Executive Action Agenda it released last week, including requiring Medicare Advantage to cover services from any medical provider that accepts Medicare's approved rate, prohibiting plans from forcing seniors who use the program to try cheaper medications before obtaining the treatment they need, and prohibiting the use of algorithms to determine coverage and provider payments.

Those reforms would "quickly show profiteering private insurance companies that harm patients with their fraud and abuse that this is an administration that will stand up to this powerful lobby and protect patients."

Jayapal noted that the administration's decision to delay implementing Medicare Advantage reforms came shortly after a decision by the U.S. Department of Health and Human Services (HHS) to not require the manufacturer of Xtandi, a prostate cancer drug, to lower the medication's nearly $190,000 annual price tag—five times the price in other countries.

As Common Dreams reported last month, HHS said it would not act to immediately grant march-in rights—which would allow the government to grant a patent license to companies other than the drug's manufacturer.

Instead, the agency said it "will pursue a whole-of-government approach informed by public input to ensure the use of march-in authority is consistent" with legislation meant to ensure the public availability of government-funded inventions such as Xtandi.

"Here too, the Department of Health and Human Services is delaying, announcing it would review its 'march-in' rights to lower the cost, rather than putting them to immediate use," said Jayapal. "Our constituents continue to be crushed by the costs of healthcare and prescription drugs. We cannot let that continue."

Also included in the CPC's Executive Action Agenda is a call for the administration to "ensure widespread and equitable access to taxpayer-funded pharmaceuticals and medical technology" and to "use existing legal authorities to dramatically lower costs of essential drugs" including Xtandi, as well as establishing "reasonable terms" under march-in rights legislation.