Medicare Advantage plans are having tremendous success, with reduction in premiums amounting to 7%, an expansion of choices, and a 10% increase in enrollment from a year ago, U.S. Health and Human Services Secretary Kathleen Sebelius boasted on Wednesday.
But the administration's claims were tempered moments earlier when officials from America's Health Insurance Plans warned that enrollment is expected to dramatically decline hereafter, from 11.7 million in 2011 to 7.5 million in 2018, and 7.8 million in 2019, according to an analysis from the Congressional Budget Office. That's because of $200 million in cuts, legislated by language in the Patient Protection and Affordable Care Act.
"As those cuts go into effect, plans will not be able to continue offering the same level of coverage they offer today and, in some markets, may have to stop offering coverage altogether," said AHIP spokesman Robert Zirkelbach in e-mail. "This is what happened last time the program was cut dramatically."
Sebelius said those concerns have been heard. "Now, many people raise fears over and over again that under the Affordable Care Act, beneficiaries would see their Medicare Advantage options shrink and their premiums rise. Instead, we are seeing just the opposite. For the 48 million Americans who count on Medicare, this program is strong and getting stronger in 2012."
She added that on average, people in every county have 26 Medicare Advantage plans to choose from, and 99.7% of beneficiaries have access to such a plan if they want one."
Additionally, with the Medicare Advantage one to five star plan rating system, "more and more beneficiaries are in four or five star plans."
Sebelius said Medicare Advantage and regular Medicare is strong for four key reasons:
1. Free recommended preventive services and annual wellness visits are now available to all Medicare beneficiaries, so "seniors no longer have to think about price when the time for the kind of care that can save their lives, like mammograms or colon cancer screenings."
2. A continuation of a 50% discount on covered drugs for seniors with Part D coverage who fall into donut hole, even as their premiums remain unchanged. "Before the law was passed, nearly one in four seniors reported skipping doses, cutting pills in half or not filling a prescription at all simply due to the cost."
3. The Affordable Care Act's investments in fraud and waste prevention "have returned billions of dollars to the Medicare Trust Fund, and last year fraud prosecutions jumped by almost 70%."
4. The use of health information technology and innovative strategies to improve healthcare are being encouraged by the administration.
Jonathan Blum, Centers for Medicare & Medicaid Services deputy administrator, agreed with Sebelius that Medicare Advantage is strong, and said companies with those products show no signs of retreating from that market.
"The schedules of future payment changes are well laid out; it's public information, and we really look at how the market is working. It's a very competitive marketplace, and beneficiaries continue to find value...We're confident the program will continue to grow over the next several years," Blum said.
He added that "plan actuaries can calculate as well as anybody what the future payment changes are coming into the market and (they're) wanting to stay in the market and compete for beneficiaries by offering them good value."
In his release, AHIP spokesman Zirkelbach said Medicare beneficiaries currently choose Medicare Advantage coverage for their lower out-of-pocket costs and innovative services such as care coordination that improve quality and safety.
An analysis released by the Government Accountability Office in January shows that the Centers for Medicare & Medicaid Services overpaid Medicare Advantage plans between $1.2 billion and $3.1 billion in 2010, and likely overpaid even more in 2011.