Medicare Advantage: A Spotlight

Medicare Advantage enrollment

Medicare Advantage has been in the news a lot lately, with its enrollees growing to one-third of the Medicare population in 2017. Over the past year, MA has grown by 8%, or 1.4 million, beneficiaries. The reasons more people are choosing MA plans could be the cost, access, convenience, and quality. Also the limit on out-of-pocket spending is a big benefit to older adults, especially those with chronic conditions.

Medicare Advantage plans offer the same coverage as Medicare but through a private insurer. These plans sometimes include additional coverage, like dental, vision, and fitness memberships. With the growing number of baby boomers joining the Medicare community, it is important to keep track of Medicare Advantage to make sure it is working effectively and justly for patients, doctors, and the Medicare system.

Medicare Advantage Rates ‘Anchored’ by Original Medicare

A new study by Erin Trish at the USC Schaffer Center for Health Policy and Economics found that “physician reimbursement in Medicare Advantage is more strongly tied to traditional Medicare than to commercial prices, but Medicare Advantage plans take advantage of favorable commercial prices for services for which traditional Medicare overpays.” This is different than the situation with commercial insurers, who tend to pay doctors a lot more than Medicare. But Medicare Advantage is in a unique position, being halfway between government Medicare and private insurance. The rates paid by Medicare seem to serve as an anchor for the prices paid to physicians by Medicare Advantage.

 

Some Negative Press on Medicare Advantage

A report from the Government Accountability Office has revealed that more seniors who are in poor health are dropping out of Medicare Advantage programs, possibly due to a lack of good service. The patients said it was harder to access their preferred doctor, specialist, hospital, or other medical care. With Original Medicare, the beneficiary is free to go to any doctor or hospital, however with Medicare Advantage, the patient must use doctors and hospitals in their plan’s network.

This news comes in the wake of other reports of federal officials fining and penalizing various Medicare Advantage programs for delaying or denying access to benefits, and discriminating against “unprofitable” patients.

With all this news on Medicare Advantage, let’s now take a closer look at the stats on MA for 2017.

KFF Market Spotlight for 2017

The Kaiser Family Foundation puts out a market spotlight each year on the Medicare Advantage Program. Their findings for 2017 are very interesting and show the growing nature of the program.

Enrollment in Medicare Advantage has increased steadily since 2005, and is now up to one-third of all Medicare beneficiaries. UnitedHealthcare and Humana have the lion’s share of enrollment at 41%.

Key Findings

Here are the key findings of Kaiser Family Foundation’s most recent data spotlight on Medicare Advantage as of March 2017.

  • How is enrollment? Enrollment has increased 71% since the Affordable Care Act (ACA) was passed in 2010. One in three people on Medicare is now enrolled in a Medicare Advantage plan. The total number of enrollees as of 2017 is 19 million.
  • Which insurance companies? UnitedHealthcare and Humana together have 41% of enrollment. More than half of all enrollees are in UnitedHealthcare, Humana, or BCBS (excluding Anthem BCBS plans).
  • Where? 40% of Medicare beneficiaries in MA plans are in six states (CA, FL, HI, MN, OR and PA). Medicare Advantage enrollment is very low in three states (AK, VT and WY). The highest penetration of MA enrollees is in Miami-Dade County, FL, and the lowest is in Lake County, IL.
  • What about premiums? Average Medicare Advantage premiums have remained relatively stable for the past several years. 2017’s average is $36 per month. (MA beneficiaries pay this premium in addition to their regular Medicare Part B premium.)
  • And overall costs? Trends show that other costs are rising – out-of-pocket limits have increased 21% and average Medicare Part D deductibles are up nine-fold since 2011.

The Congressional Budget Office (CBO) projects that Overall MA enrollees will increase from 33% to 41% of Medicare beneficiaries by 2027.

Do Your Homework When Enrolling

Medicare Advantage plans and their coverage can change – be sure to double check each year for your plan’s copays and specific coverage. Also check the deductibles, star rating, and travel coverage to make sure your plan covers all of your needs. A study by Paul Jacobs and Eamon Molloy shows that beneficiaries tend to remain in the plan they are in (and end up paying more) without checking to see if there is one available with lower premiums.

Make sure to really understand your policy before choosing it. Your favorite doctor or specialist might not be available under your new Medicare Advantage plan. If you are looking to switch to Medicare Advantage, you can do so during the open enrollment period from October 15 to December 7. If you are enrolling for the first time, you may enroll the three months before, the month of your birthday, or the three months after the date you turn 65. If you need to disenroll from an MA plan, the period is January 1 to February 14.

Related Links

Understanding Medicare Advantage

Video: Medicare Advantage vs. Medigap

Choosing a Medicare Advantage Plan

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