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Life Health > Health Insurance > Medicare Planning

Medicare Advantage: The Calm Before the Storm

By Allison Bell

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Consumers who still have access to Medicare Advantage plans will be paying slightly lower rates in the coming year.

Medicare Advantage premiums will be an average of 1% lower in 2011 than they are today, according to officials at the Centers for Medicare & Medicaid Services (CMS).

Medicare Advantage is a program that gives private carriers a chance to provide alternatives to traditional, government-administered Medicare coverage. The plans have been covering about 11 million of Medicare’s 47 million enrollees. Suppliers of another alternative to relying solely on traditional Medicare – private Medicare supplement insurance – are covering about 10 million enrollees.

The 2011 Medicare Advantage annual open enrollment season is set to start Oct. 15 and last until Dec. 31. About 99.7% of the Medicare enrollees who have access to Medicare Advantage plans this year will continue to have access in 2011, officials predict.

The Affordable Care Act – the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA) – will start to phase in major changes in federal Medicare Advantage funding provisions in 2011. But, for now, the legislation having the most immediate effect on coverage for older U.S. residents is the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008, which is imposing new provider network and quality reporting requirements on Medicare Advantage private fee-for-service (FFS) plans.
Medicare Advantage managed care plans are not changing all that

much this year, and projections suggest that overall enrollment in the plans will increase about 5% in 2011, officials say.

Medicare Advantage private FFS plans are undergoing more changes, but only about 2,300 private FFS plan enrollees will be losing access to Medicare Advantage private FFS options entirely, officials say.

Because of an Affordable Care Act preventive care benefits mandate provision that will take effect for plan years starting on or after Thursday, most 2011 Medicare Advantage plans and traditional Medicare coverage will cover basic preventive care benefits, such as inoculations and mammograms, without imposing a deductible requirement or other cost-sharing requirements.

The Affordable Care Act also will limit Medicare Advantage plan cost sharing for skilled nursing care, chemotherapy and renal dialysis to the amounts paid by traditional Medicare program enrollees.

Karen Ignagni, president of America’s Health Insurance Plans, Washington, says Medicare Advantage rates are likely to increase rapidly after 2011 if current rules stay in place. “Medicare health plans are doing everything they can to keep coverage as affordable as possible,” Ignagni says in a statement.

But the Affordable Care Act freezes 2011 Medicare Advantage benchmark rates at 2010, meaning that Medicare Advantage plans will have no way to respond to increases in general health care costs, or the increases in Medicare physician reimbursement rates mandated by Congress, Ignagni says.

In the past, Medicare providers have responded to program funding cuts by trying to keep rates stable for a year or two, then, ultimately, dropping out of the market, AHIP says.

Analysts at the Congressional Budget Office have estimated that, if all Affordable Care Act provisions stay on the books and are implemented as written, Medicare Advantage enrollment will drop to 9.1 million in 2019, AHIP says.

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