Medicare Advantage premiums will decrease by an average of 4 percent in 2012 and plans expect enrollment to increase by as much as 10 percent, according to an announcement by the Department of Health and Human Services (HHS) Thursday. This comes on the heels of any earlier announcement showing that the average Part D prescription plan premiums would remain virtually unchanged in 2012.
"Thanks to the Affordable Care Act, Medicare is stronger than ever," said HHS Kathleen Sebelius in an announcement. "On average, Medicare Advantage premiums will go down next year and seniors will enjoy more free benefits and cheaper prescription drugs."
As it did for 2011, The Centers for Medicare & Medicaid Services used authority provided to it via the Affordable Care Act to work directly with the private insurers who offer MA plans to both keep costs in check, while also maintaining benefit levels.
[See also: Medicare to debut quality bonus payment demonstration for Medicare Advantage; Affordable Care Act Triggers RAC Expansion to Medicaid, Medicare Advantage and Part ]
The trend of lower premiums runs contrary to predictions after the passage of health reform that painted a gloomy picture for MA plans. Opponents of reform maintained that premiums would increase significantly while insurers would also dramatically cut benefits and in some cases exit markets entirely, restricting access to a good portion of the senior population.
"Instead we are seeing just the opposite," said Sebelius in a press conference yesterday. "Medicare plans are stronger than ever and beneficiaries continue to have access to affordable options."
According to HHS figures, 99.7 percent of the Medicare eligible population still has access to a Medicare Advantage plan.
Despite the efforts and results of the past two years, not everyone is convinced the trend for MA premiums is sustainable.
Robert Zirkelbach, spokesman for America's Health Insurance Plans told Kaiser Health News that the trade groups stands by its earlier prediction that the law will adversely affect MA plans. "As these cuts take effect in the coming years, Medicare Advantage beneficiaries will face higher out-of-pocket costs, reduced benefit, and fewer healthcare choices," he said.
At a press conference yesterday, Sebelius also noted that the open enrollment period for Medicare Advantage plans both starts earlier this year on Oct. 15 as opposed to Nov. 1 and runs longer – for seven weeks until Dec 7.
Also new in 2012, Medicare will provide financial rewards to MA plans based on its Five-Star quality rating methodology. It will also offer Five-Start Part D plans the opportunity to market their plans throughout the year as an incentive for their performance.
"Plans that do a better job serving the needs of their Medicare members should be rewarded and all plans should be encouraged to improve their performance," added Jonathan Blum, CMS deputy administrator and director of the Center for Medicare.