The Value of Medicare Advantage

1. The Value of Medicare Advantage • Karen Ignagni • President and CEO • America’s Health Insurance Plans • July 16, 2007

2. Choices Before Congress • Maintain Choices in All Markets • versus • Reducing or Eliminating Choices

3. How to Evaluate Choices • Assess History • Assess Value • Consider Constituent Impact

4. Medicare Advantage: An Historical Look* Riskplans MedicareAdvantage Medicare +Choice BBA payment methodology and rural floors-PFFS option begins (-$97B) /10 years Part D BIPA Urban floors and higher rural floor payments $32.5B/10 years MMA $4.3B/10 years for MA Improvements $10 B/10 years for Stabilization Fund (Now $ 3.5B per TRHCA) *Chart based upon CMS Medicare Advantage Fact Sheet (3/07).

5. Bipartisan Congressional Efforts to Extend Access to Choices • BBA 1997 – Congress established rural “floors” (rates intentionally set above FFS) • BIPA 2001 – Congress established MSA floor

6. Congressional Intent Achieved MA Plans in 2003 MA Plans in 2006

7. Medicare Advantage Payment-2007 Floor Counties

8. Congressional Intent Achieved --Access to benefits and savings

9. 53% Very Satisfied 37% Smwht Satisfied 49% Very Satisfied 35% Smwht Satisfied The overwhelming majority of seniors enrolled in Medicare Advantage plans are satisfied with their coverage, and satisfaction is up since 2003. Question: How satisfied are you with each of the following aspects of your Medicare coverage: Your Medicare coverage overall? Source: Ayres, McHenry & Associates (March 2007)

10. Serving Vulnerable Populations • MA is important choice for low-income and low-income minority beneficiaries

11. One-third of all seniors, and three-fifths of low-income seniors, would skip some health care treatments if they no longer have access to a Medicare Advantage plan. Source: Ayres, McHenry & Associates (March 2007) Question: If Congress makes cuts to the Medicare Advantage program and you had to use traditional Medicare coverage, would you pay higher out-of-pocket costs so you could continue to receive the same health care treatments you receive now, or would you not pay higher out-of-pocket costs and skip some of the health care treatments you receive now?

12. MA Extra Benefits and Services -- Results

13. MA and Medicare’s Financial Outlook: Long Term Costs

14. Three-fourths of doctors think cuts to Medicare Advantage will harm seniors. Source: Ayres, McHenry & Associates (March 2007) Question: If Congress makes cuts to the Medicare Advantage program, do you think that will have a negative effect on seniors enrolled in a Medicare Advantage plan, or do you think that will have no real effect on seniors enrolled in a Medicare Advantage plan?