Medicare Advantage Enrollment Expected to Spike

Margaret Dick Tocknell, September 19, 2011

Enrollment will increase and premium prices will drop as health plans prepare for the upcoming open enrollment period for Medicare Advantage, officials at the Department of Health and Human Services have announced.

Look for a 10% increase in enrollment to about 13.1 million beneficiaries while premiums shrink by 4% to an average $32 per month. Medicare Advantage, private health insurance available to Medicare beneficiaries, accounts for about 25% of total Medicare enrollment.

Government officials made the obligatory nod to the Affordable Care Act as the driving force behind the news but there are a lot factors at play here, including a bigger baby boomer population that’s comfortable with managed care and the move by businesses to shift their 65 year-old and older retirees off of expensive employee -sponsored plans and onto more cost-effective Medicare Advantage plans.

“Health plans see Medicare Advantage as a stable product where they can make money,” said Dan Mendelson, CEO of Avalere Health, a Washington, D.C.-based research firm. He noted that members are using less medical care, and reduced utilization has enabled plans to drop premium prices for the Medicare Advantage products.

He explained that health plans also are “learning to work with CMS (the Centers for Medicaid & Medicare Services) as customers, which is something we don’t often see in a Democratic administration.”

In addition, health insurers are looking at Medicare Advantage as a way to increase their overall market presence especially as they look to attract a share of the important individual market.

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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