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Medicare Advantage premiums drop while enrollment increases

Robin Wulffson MD's picture

WASHINGTON, DC – On February 1, Health and Human Services (HHS) Secretary Kathleen reported that Medicare Advantage Premiums had decreased by 7% and enrollment has risen by about 10% since this time last year. The figures confirm that HHS projections from last September that enrollment in Medicare Advantage plans would continue to rise and average premiums would continue to fall. Average premiums have fallen from $33.97 in 2011, to $31.54 in 2012, while enrollment has risen from 11.7 million in 2011 to 12.8 million in 2012.

Medicare Advantage allows seniors to transfer from traditional Medicare to private health insurance plans. Seniors have an average of 26 providers from which to choose, including health maintenance organizations (HMOs) and preferred provider organizations (PPOs). “The Medicare Advantage program is stronger than ever,” said Secretary Sebelius. “Premiums are down on average, enrollment is up, and thanks to the Affordable Care Act we have unprecedented new tools to ensure that seniors and people with disabilities are getting the best value out of their coverage.

On the average, seniors have a choice of 26 Medicare Advantage plans in nearly every county across the nation. Access to Medicare Advantage is excellent: 99.7% of Medicare beneficiaries have access to a Medicare Advantage plan. Since 2010, when the Affordable Care Act was passed, Medicare Advantage premiums have fallen by 16% and enrollment has risen by 17%.

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“Not only are average premiums lower, but plans are better, with more beneficiaries enrolled in 4 and 5 star plans,” said Centers for Medicare & Medicaid Services (CMS) Acting Administrator Marilyn Tavenner. “The Affordable Care Act has strengthened Medicare Advantage by motivating plans to improve the quality of their coverage.” CMS Deputy Administrator Jonathan Blum noted, "We're seeing a very competitive landscape.The plans seem to want to compete hard for their beneficiaries."

In 2012, due to the Affordable Care Act, Medicare Advantage plans will start receiving incentives to achieve high quality scores through the use of quality bonus payments. As an extra incentive for high quality performance, CMS is allowing Five-Star Medicare Advantage and Part D plans to continuously market and enroll beneficiaries throughout the year.

A number of the nation’s largest health insurers provide Medicare Advantage plans. Humana purchased two Medicare Advantage contractors in the third quarter of 2011 year and enrollment increased over the past 12 months. Wellpoint also acquired an Advantage contractor in 2011 and experienced an enrollment increase. The CEOs of WellPoint, Humana and UnitedHealth Group all predicted their Medicare business would grow, in part because of the influx of Baby Boomers.

Source: Health and Human Services

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