Why Enrollment in Private Medicare Plans Has Grown Despite Reduced Growth in Plan Payments

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<p>Enrollment in Medicare Advantage plans has grown significantly since 2009, defying some predictions that the opposite would happen after Medicare began reining in payments rates for plans. Today, private plans serve one-third of all Medicare beneficiaries.</p><p>According to a new Commonwealth Fund analysis, Medicare Advantage plans responded to the lower growth in payments between 2009 and 2014 by controlling their costs. Researchers Stuart Guterman, Laura Skopec, and Stephen Zuckerman find that while projected spending per beneficiary in traditional Medicare increased 5 percent in this timeframe, plan benchmark rates increased only 1.5 percent. Nonetheless, plan enrollment increased across the board, growing 48 percent nationwide. </p>
<p>“The fact that Medicare Advantage plans, in the aggregate, have responded to declining payment rates by controlling costs is encouraging news and lends credence to the theory that plans would respond to competitive market conditions by increasing efficiencies,” the authors write. Moreover, there may be room for further improvement, since Medicare’s payments continue to exceed plan costs in many parts of the country.</p>

http://www.commonwealthfund.org/publications/newsletters/ealerts/2018/mar/medicare-advantage-plans-payment-changes Read the brief