“If an insurer has a commercial plan in an area and wants to have a stronger presence in a market then having a Medicare Advantage product can help,” said Mendelson. That visibility will be critical as insurers compete for individual business through health insurance exchanges.
Time will tell if consolidation in the Medicare Advantage market will eventually mean higher premiums for beneficiaries. With the program expected to absorb more than $130 billion in cuts between 2010 and 2020, smaller players are already finding it more difficult to remain in the market.
In addition to the enrollment and premium news, HHS officials announced that in 2012 CMS will provide financial rewards to Medicare Advantage plans with high quality scores, under its five-star rating program. An estimated $6.7 billion is earmarked for the program. CMS will allow five-star Medicare Advantage and Part D plans to continuously market and enroll beneficiaries throughout the year, as an extra incentive for high quality performance.
“Plans that do a better job serving the needs of their Medicare members should be rewarded and all plans should be encouraged to improve their performance,” said Jonathan Blum, CMS deputy administrator and director of the Center for Medicare in a press statement.
Open enrollment begins on October 15th and ends seven weeks later on December 7th.