Medicare Advantage Plans Will Cost Less in 2012
You may have heard some depressing predictions that Medicare Advantage private insurance plans would soon reduce coverage benefits or increase premiums. So far, nothing could be further from the truth. The Obama administration said nearly 12 million beneficiaries enrolled in Medicare Advantage plans will see their monthly premiums decrease by an average of four percent next year, but the benefits will remain the same.About a quarter of all Medicare beneficiaries are now enrolled in Advantage Plans, according to Jonathan Blum, deputy administrator of the Medicare and Medicaid Service Centers (CMS). He expects enrollment to increase by 10% next year because these plans are also reducing the direct costs of beneficiaries. Plans will reduce co-payments and deductibles.
To give you an idea of what price range we’re talking about, the average monthly Medicare Advantage premium is around $39 this year, so visiting https://www.medicareadvantageplans2020.org is important and according to the Kaiser Family Foundation. The economic downturn, the recession, or whatever you want to call, has actually reduced the cost of coverage.Advantage members used minimal health care during the recession and insurers had fewer claims to cover. This means they did not have to spend as much on the prizes they received as they expected.There is also another incentive for insurers to keep costs low on their Medicare Advantage plans. These plans often offer prescription drug coverage, which puts them in competition with Medicare-controlled drug plans, also known as Part D. The Obama administration has just announced that the cost of Part D prescription drugs plans will also decrease by a share.
What drove the predictions that Medicare Advantage plans would cost more?
The government spends more per capita for recipients of private policies than for those enrolled in traditional Medicare. The Federal spending for Medicare Advantage policies were frozen this year and cuts in payments are expected. By 2012, payments will decrease lower than one percent for many, but not all, MA plans.Many claimed that premiums would have to rise to compensate for the reduction in federal funds. They did not appear in other factors, such as insurers that spend less on claims or five-star plans that get more federal funding. Health reform is providing billions of dollars in the form of quality bonuses for plans that earn four to five stars under a five-star rating system. Almost 90% of people enrolled in an Advantage plan can benefit if the plan earns a bonus.