By John Reichard, CQ HealthBeat Editor
December 1, 2011 -- White House Deputy Chief of Staff Nancy-Ann DeParle joined two Senate Democrats in calling attention to rising enrollment and falling premiums in the Medicare Advantage (MA) program—results contrary to Republican predictions of what would happen to the program under the health law.
"President Obama is committed to making Medicare stronger and today's report is another sign that the Affordable Care Act is working for America's seniors," DeParle said in a blog post.
According to a new report by the Government Accountability Office, enrollment in the most common types of Medicare Advantage plans grew 6 percent from April 2010 to April 2011, and monthly premiums dropped on average from $28 to $24, a decline of 14 percent. Benefits remained stable, and the percentage of plans with limits on out-of-pocket spending increased from 74 percent to 100 percent.
"Health reform is making Medicare Advantage more efficient, and that means more money in seniors' pockets and more seniors enrolled in high-quality plans," said Senate Finance Chairman Max Baucus, D-Mont. "The act reduced wasteful overpayments to private Medicare Advantage plans while increasing plans' incentives to offer high-quality care," said Sen. Tom Harkin, D-Iowa. CMS has instituted a bonus payment system that pays plans more if they rate highly on quality.
The health law reduces payments to Medicare Advantage plans over a period of years, which has led to projections by the CMS Actuary that enrollment will fall. That hasn't happened yet, and Democrats are making the most of their opportunity to talk about that fact. As reimbursement cuts deepen in coming years, that may change, however.
The GAO report did show declines in the number of plans offered in the MA program—from 2,307 to 1,964. Most of the drop reflected a decline in a type of plan known as private fee-for-service plans, which under a 2008 law popularly known as the Medicare Improvements for Patients and Providers Act (PL 110-275) required those types of plans to establish networks of providers. In many cases the plans stopped operating rather than meet the requirement. According to the GAO report, CMS officials said 75 percent of the plans that did not renew in 2011 were private fee-for-service plans.
GAO also noted that "the number of HMO plans also decreased—from 1,279 in 2010 to 1,127 in 2011, which in part may be due to CMS's efforts to simplify MA plan offerings by eliminating potentially duplicative plans and those with low enrollment."
