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From Health Law Daily, May 7, 2014

Medicare Advantage program grew nine percent in 2013

By Greg Hammond, JD

The Medicare Advantage (MA) program grew by nearly 1.4 million beneficiaries between 2013 and 2014, according to a Kaiser Family Foundation Issue Brief titled “Medicare Advantage 2014 Spotlight: Enrollment Market Update.” Although the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) enacted a number of measures to lower the historical overpayments to MA plans, raising concerns that MA plan enrollment would drop, enrollment actually increased nine percent to reach 15.7 million beneficiaries.

Enrollment trends. According to the Issue Brief, 30 percent of Medicare beneficiaries nationwide are enrolled in MA plans, which is a 24 percent increase from 2010. However, the number of beneficiaries enrolled in such plans varies geographically. The brief noted that less than 10 percent of Medicare beneficiaries in six states were enrolled in MA plans, while 18 states had 30 percent or more beneficiaries enrolled in MA plans. Nevertheless, with the exception of Alaska and New Jersey, all states reported an increase in MA enrollment between 2013 and 2014. New Jersey demonstrated a 2 percent drop in MA enrollment, while Alaska did not have enough enrollees to report.

Between 2013 and 2014, the majority of growth in MA plan enrollment was seen in the individual market. However, retiree enrollment in the group employment-based market demonstrated a large increase, accounting for nearly one-third of MA enrollment growth seen over the course of the last year.

Premiums and out-of-pocket costs. Between 2012 and 2014, there has been little change in average premium trends, with an average MA enrollee paying a monthly premium of roughly $35 in 2014. However, average out-of-pocket costs increased. MA enrollees that had plans with out-of-pocket cost limits over $5,000 nearly doubled over the last year, from 24 percent of enrollees to 44 percent. Consequently, enrollees with substantial medical needs may be exposed to higher costs.

A look to the future. The report noted that it is not clear how MA plans will change as far as offerings in the future, or the impact it will have on beneficiaries. “Thus far, there hasn’t been much of a change in the Medicare Advantage market, other than the increase in out-of-pocket limits and reports in the media that some insurers have scaled back provider networks,” the brief said. “Insurers will need to balance their interest in maintaining market share (and remain attractive to beneficiaries) against their ongoing interest in operating as profitably as possible.”

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