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Medicare Advantage Enrollment to Rise, Premium Costs Dip

Janice Simmons, for HealthLeaders Media, September 22, 2010

Enrollment in Medicare Advantage plans, which provide services to about a quarter of the nation's Medicare beneficiaries, is predicted to go up by about 5% in 2011, while premiums on average will dip by 1% from this year, the Centers for Medicare & Medicaid Services (CMS) announced Tuesday.

While the monthly premium decrease is small—from an average of $36.14 this year to $35.69 in 2011 (a 45-cent reduction)—the drop was unexpected among those who follow the Medicare program. For 2010, the plans saw on average a 15% increase in premium costs. CMS officials said they held down rate increases by negotiating with the insurers that sponsor the Medicare Advantage plans.

"Despite the claims of some, Medicare Advantage remains a strong, robust option for millions of seniors who choose to enroll or stay in a participating plan, said CMS Administrator Donald Berwick, MD. "The Affordable Care Act gave us new authority to negotiate with health plans in a competitive marketplace."

CMS Deputy Administrator Jonathan Blum said the administration negotiated with 300 Medicare Advantage plans to push down proposed premiums and cost-sharing increases that Medicare considered too high—bringing them "into more affordable ranges," he said.

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