Medicare Advantage: Enrollment is still growing.

Enrollment in Medicare Advantage increased by over 1 million people from 2011 to 2012.  Medicare Advantage plans are run by insurance companies which are paid by Medicare to replace a person’s “Original Medicare”. These private Medicare plans are generally HMO or PPO network plans.

The Centers for Medicare and Medicaid Services (CMS) reported today that Medicare Advantage plan premiums across the country fell from $33.97 in 2011, to $31.54 in 2012, while enrollment rose from 11.7 million in 2011 to 12.8 million in 2012.

In Arizona, most of our plans are $0 premium and most are HMO plans which require people to stay in a local network.  Arizona Advantage plans with premiums did go up, in some cases substantially.  We don’t have many PPO plans in Arizona, but the ones we have (with drug coverage) went up a lot. One plan went from $50 in 2011 to $80 in 2012. PPO plans are attractive to seniors who travel or spend time in other parts of the country because people in these plans can see doctors out-of-network.

New rules for Medicare Advantage plans have resulted in reduced payments from Medicare, and these reductions will continue for several years.  Republicans have been claiming these cuts would force companies out of the business causing millions of seniors to lose their plans.  So far, the numbers show this has not been the case, and the phasing-in of cuts over several years is allowing Advantage plans to make adjustments to their business models.  And while payments to Advantage plans are supposedly being cut, my last post was about billions of dollars in overpayments to Medicare Advantage plans.

Back in November I posted “Is there a future for Medicare Advantage?” and my answer was “definitely yes”. That is because big insurance companies like Wellpoint and UnitedHealthcare have been buying companies involved in this business.  They are investing billions of dollars to expand their piece of the Medicare Advantage pie, and they seem pretty confident it will continue to be a good and growing business.

What Next?

Related Articles

Leave a Reply

Submit Comment