Sebelius: Medicare Advantage Premium Costs To Decline Slightly In 2011
Administration officials announced Tuesday that the premiums individuals pay monthly for Medicare Advantage plans will drop 45 cents to $35.69 next year, The Associated Press reports. That's about a 1 percent savings for the private, Medicare-funded health plans, but Health and Human Services Secretary Kathleen Sebelius contrasted it to the 15 percent increases in 2010. "The fate of the plans has been a source of concern because the new health care law cuts payments to the private insurance companies that operate them. However, payment rates are frozen for 2011 and significant reductions are still a couple of years away." Officials attributed this year's savings to "stronger oversight" (Alonso-Zaldivar, 9/21).
"By contrast, commercial insurance premiums for many people under 65 and many small businesses are increasing 10 percent to 25 percent or more," according to The New York Times. "Insurers say that a significant share of the increases is attributable to requirements of the new law, a contention that infuriates Obama administration officials and Democrats in Congress." Policy analysts and lawmakers were taken by surprise by the news that Advantage premiums would drop instead of increase. Federal officials, though, said they used new powers from the health law to negotiate and reject plan prices granted by the health law to prevent increases (Pear, 9/21).
The Wall Street Journal: The officials "said Tuesday they denied rate increases and benefit cuts in 298 cases. As a result, they said, Medicare Advantage premiums will be 1% lower on average in 2011." They had received 2,100 bids in total. But, one financial analyst points out that the premiums "don't tell the whole story." Copays and deductibles are rising for many members and some benefits, such as gym memberships, are being cut. In all, changes next year are expected to cost seniors an extra $13 a month even as premiums drop (Adamy and Johnson, 9/22).
NPR's Shots Blog: The plans, however, mostly "managed to maintain or reduce monthly premiums while keeping virtually all their benefits intact, including extras traditional Medicare doesn't offer. How's that possible? Well, a bunch of big brand-name drugs popular with seniors are set to go generic in 2011. So the insurers will be able to save a lot of money by moving people to the cheaper knockoffs of those medicines, including cholesterol-fighter Lipitor, blood-thinner Plavix and blood pressure medicine Cozaar, according to an analysis by Avalere Health" (Hensley, 9/21).
USA Today: "Virtually none of the 11 million seniors who choose private health insurance plans under Medicare will lose access to those plans next year, federal officials announced Tuesday, despite fears that strict payment rates under the new health care law would cause some insurers to drop out. ... 'Despite lots of predictions of gloom and doom, the Medicare Advantage program is stronger than ever before,' Sebelius said. The government also announced that Medicare prescription drug premiums will remain relatively stable in 2011, and more insurance plans will eliminate a coverage gap included in a 2003 law to make the program affordable" (Wolf, 9/21).
The Hill: Administration officials said enrollment in "the controversial Medicare Advantage (MA) program" will increase in the year ahead. "White House health officials said the numbers indicate that - despite threats from conservatives and the insurance industry that the new healthcare reform law will cripple MA plans at the expense of seniors - both patients and taxpayers will benefit from the reforms" (Lillis, 9/21).
Modern Healthcare: "Some MA plans, however, will be exiting the market 'due primarily to 2008 legislation that tightened the quality standards for private fee-for-service plans,' CMS Administrator Don Berwick said during the conference call. As a result, about 2,300 Medicare Advantage beneficiaries will be left without a choice of MA plan. 'The insurance industry has been signaling to pull back from this market for some time. We will extend every resource to assist these affected beneficiaries transition to new coverage as seamlessly as possible,' Berwick said" (Lubell, 9/21).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.