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 Last month the Center for Medicare and Medicaid Services (CMS) announced that the government would increase Medicare Advantage spending by 1.6% for 2012. Primarily this increase is caused by a bonus payment program, controlled by the Affordable Care Act, created to improve the quality of care for people with Medicare by giving financial incentives to Medicare Advantage plans. Those plans with a four or five star quality rating will get a higher payment; as well as, some counties getting more than others. The CMS will also offer a special enrollment period in 2012 to help beneficiaries switch to a five star rating plan at any time during the year. This increase also takes into account the changes to Medicare Part D for those seniors entering the “doughnut hole.” These beneficiaries will receive a 50% discount on brand-name and 14% on generic prescription drugs, doubling what the program currently pays. The unexpected news sent HMO stocks up in after-hours trading. The final rate notice will be available April 4, 2011.
Agenda behind Medicare Advantage 2012 Increase Not Entirely Altruistic
The increase was decidedly unexpected and is now seen as a way to keep seniors happy through the 2012 elections. The Wall Street Journal reports, "The White House has apparently decided that it won’t enforce the unpopular parts of its health-care plan until after the 2012 election." Since seniors are the largest group of voters, this increase is seen as another temporary concession based on the public mood and to keep them happy in the election year.
Democrats dislike Medicare Advantage and Barak Obama vowed to eliminate the program when he said "We shouldn’t be rewarding the insurance industry for deceiving and defrauding our seniors" in 2007. Republicans like the program, showing that market pricing and competition are a better alternative to the government control of Medicare and that of the proposed health care law restrictions. Also, it is similar to the Medicare voucher program proposed by Paul Ryan. Ultimately, if the health care law goes though as it currently states, Medicare Advantage proposed cuts of $136 billion over the next ten years will have to go into effect as well. Meanwhile, the number of seniors in the Medicare Advantage program continues to grow, increasing 7% last year to 26% of Medicare beneficiaries.
What do you think about the proposed increases for Medicare Advantage as a way to keep voting seniors happy in an election year? Do you think it will work? Share your opinion in the comments.
Forethought Life Medicare Supplement Available in Nebraska and North Dakota
Effective March 9, 2011 Forethought Life Medicare Supplement is now available in Nebraska and North Dakota – please see the Forethought Nebraska Rates & App and the Forethought North Dakota Rates & App.
Woodmen of the World/Assured Life Rate Adjustment
Effective May 1, 2011 Assured Life Medicare Supplement rate adjustments for standardized plans in Alabama, Arizona, Illinois, Ohio, Oklahoma, Pennsylvania, Texas, and West Virginia; Medicare SELECT plans in Ohio, Pennsylvania, and Texas; and, Woodmen of the World standardized plans for Oregon, Utah, and Washington. Please see the WOW/Assured Rate Adjustment for May 2011.
Sources: MedPage Today, National Underwriter, Wall-Street Journal
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