Medicare Advantage health plans are slated for a modest premium hike next year, but uncertainty remains over the long-term prospects of the value-based insurance program.
Federal officials released data last week forecasting an average 4% increase in Medicare Advantage health plan premiums in 2015.
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Marilyn Tavenner |
Marilyn Tavenner, administrator of the U.S. Centers for Medicare & Medicaid Services, said in a prepared statement that the Medicare Advantage program has been thriving since the adoption of the Patient Protection and Affordable Care Act in 2010.
"Since the Affordable Care Act was enacted, enrollment in Medicare Advantage plans is now at an all-time high, and premiums have fallen," Tavenner said.
Medicare Advantage Program Standards Tightening
Between 2010 and 2015, enrollment in MA health plans is forecast to increase 42%, with premiums declining 6%, CMS reported last week. This year, the average monthly premium for an MA health plan is $30.96, according to CMS.
Quality Improvements
The federal agency also reported quality improvement in MA health plans. CMS ranks MA health plan quality on a scale of one to five stars. About 40% of MA health plan contracts are set to receive quality rankings of at least four stars in 2015, an increase of approximately 6% from this year, according to CMS.
MA health plan quality has steadily increased since 2012, the federal agency reported: "About 60 % of MA enrollees are currently enrolled in plans with four or more stars for 2015, an increase of approximately 31% compared to the percentage in four or five star plans based on 2012 ratings."
America's Health Insurance Plans, the Washington, DC-based organization that represents commercial health insurance carriers, reacted cautiously to the CMS announcement.
14 Medicare Advantage Plans Earned 5 Stars in 2013
"The growing number of seniors choosing to enroll in Medicare Advantage is a testament to the value the program provides for beneficiaries," Brendan Buck, AHIP's VP of communications, said in a prepared statement.
"At the same time, the data show that certain areas are feeling the impact of payment cuts to the program. With the majority of cuts still looming, there is potential for further disruption to beneficiaries in the future. That's why the 1.6 million seniors who make up the Coalition for Medicare Choices and more than 270 members of Congress recently came together to protect this program and the millions who rely on it."
On Friday, Sunnyvale, CA-based HealthPocket released an analysis of the 2015 CMS data on the Medicare Advantage program. The company ranks and compares health plans across the country.
HealthPocket is pegging the average MA health plan premium increase for 2015 at less than 2%, rising from $61.69 monthly to $62.69. Company officials stated that their figures for monthly health plan premiums are nearly twice as high as the CMS figures because "the government weighted their average by projected plan enrollment rather than averaging premiums across all options available in the market."
Uncovering Medicare Advantage Cuts' Brighter Side
While HealthPocket is painting a rosier picture for the percentage increase in MA health plan premiums next year, the company reported the number of $0 MA health plan premiums in 2015 is set to decline 19%.
Kevin Coleman, head of research and data at HealthPocket, says the modest average MA premium increase forecast for next year has to be balanced against the decline in the number of MA health plans with zero-cost premiums.
"The importance of stable Medicare Advantage premiums to the plans that offer them is that premium increases that are perceived as too high are among the two biggest risks for member attrition. The other being poor customer service experiences," he said. "A 2% premium increase is clearly stable. However, this must also be viewed in light of the decline in availability of $0 premium plans."
Coleman says the MA health plan data CMS released last week is unlikely to calm the shrill political debate over the future of Medicare Advantage.
"The jury is still out regarding the long-term prospects of the Medicare Advantage program because there are outstanding questions regarding the funding cuts Medicare Advantage will experience. For example, cuts were scheduled for 2015 and then reversed," he said.
Christopher Cheney is the CMO editor at HealthLeaders.