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Medicare Advantage plans expected to increase by 7 percent in 2013

The number of Medicare Advantage plans being offered is expected to increase by 7 percent over the next year, from 2,430 currently to 2,600 in 2013, according to a report from Avalere Health.

More than 100 MA plans will be available in California, Texas, Pennsylvania, New York and Florida, according to the report, while less populous states in New England, the South and the West will see up to 60 different plans. MA benefits will likely also hold steady into next year, with monthly premiums increasing by only $1.47, or 5 percent.

The findings come amid some debate about the projected long-term growth or decline of MA enrollment.

In September, the Centers for Medicare and Medicaid Services announced that MA enrollment was likely to grow by 11 percent in 2013, following a 28 percent growth in enrollment since the Affordable Care Act became law in 2010.

As the American Association of Health Plans (AHIP) has pointed out, though, the Congressional Budget Office predicts that MA enrollment will decline by 23 percent from pre-ACA levels in 2019, to 10.7 million, largely because of $150 billion in direct cuts over 10 years, another $50 billion in potential indirect cuts and new premium taxes, all linked to the ACA.

“As the payment cuts and new taxes take effect, Medicare health plans will continue to do everything they can to preserve benefits and keep coverage as affordable as possible,” AHIP president and CEO Karen Ignagni said in mid-September. “However, given the size and scope of these cuts, Medicare beneficiaries are likely to face higher costs and coverage disruptions in the coming years.”

Even amid these predictions, several insurers have placed large bets on the Medicare Advantage market with acquisitions over the last year, such as UnitedHealthcare, Humana, WellPoint and Cigna.

Jennifer Kowalski, director in Avalere's health reform practice, thinks that insurers may be banking on baby boomers to choose Medicare Advantage as a supplement. According to the Pew Research Center, 10,000 babyboomers will turn 65 everyday, until 2040.

"WIth the vast numbers of aging baby boomers who will be coming into the program in the coming years, there is a hope that those folks will choose Medicare," Kowalski said.

 

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