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Medicare Advantage plans on the rise ahead of open enrollment and star ratings release

A perfect storm of an aging demographic, lower premiums, high margins and CMS flexibility is behind MA success amid political Medical for All.

Susan Morse, Managing Editor

Medicare Advantage plans that scored well on star ratings began releasing their results yesterday ahead of a full announcement by the Centers for Medicare and Medicaid Services and the start of open enrollment on October 15.

Star ratings are important to health plans because they are tied to bonuses and benchmark rates, and because they make a difference to consumers when choosing a plan.

They've become more important as insurers get into and increase their reach into the lucrative MA market.

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America's Health Insurance Plans, citing information from Becker's, said an estimated 20 insurers are expanding Medicare Advantage products.

Cigna recently announced it would add MA offerings in 80 counties across 17 states.


Medicare has become a political battle heading into the 2020 election.

Democratic presidential front-runners Sens. Bernie Sanders and Elizabeth Warren support a Medicare for All plan and Joe Biden is in favor of a public option.

Countering that, President Trump signed an executive order last week that he said would strengthen Medicare. Among other policy changes, Trump proposed modifying traditional Medicare's fee-for-service payments to reflect the prices paid in Medicare Advantage and commercial plans.

This would be a large price increase that critics say would bankrupt Medicare, not save it.

What's interesting is that within the executive order are policy recommendations to encourage MA benefit structure and plan design, telehealth and supplemental Medicare Advantage benefits such as shared savings for beneficiaries, with the added mandate, "ensure that, to the extent permitted by law, FFS Medicare is not advantaged or promoted over MA with respect to its administration."

The Centers for Medicare and Medicaid Services has encouraged MA plans through recent payment updates and new benefit flexibility.

While insurers have been slow to get onboard to benefit flexibility due to the challenges of cost versus the number of members served by the targeted benefits, new reports show they are increasingly offering meal delivery, transportation for grocery shopping and other non-medical services.

MA plans already offer dental, vision and other benefits not offered through traditional Medicare.

CMS has also been touting the decrease in Medicare Advantage  monthly plan premiums for 2020. The premiums are expected to decrease by 14% to $23, from an average of $26.87 in 2019. This is the lowest that the average monthly premium for a Medicare Advantage plan has been since 2007, CMS said in September.


An estimated third of all Medicare beneficiaries choose a Medicare Advantage plan and that number is expected to grow as insurers promote new benefits allowed by CMS.

Annual gross margins in the Medicare Advantage market averaged $1,608 per covered person between 2016 and 2018, about double the margins in the individual and group markets, according to a report released by the Kaiser Family Foundation in August.


After CMS announced the lower premiums for MA plans, America's Health Insurance Plans said, "Medicare Advantage continues to outperform and offer better coverage and care than traditional Medicare, even though the average payment to MA plans is equivalent to costs for traditional Medicare. This announcement is a testament to the innovation by Medicare Advantage plans that has been promoted through greater CMS flexibility, which is driving down costs, enhancing choices, and improving the health of millions of America's seniors."

Twitter: @SusanJMorse
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