CMS Says Payments to Medicare Advantage Plans Will Increase by 3.6% in 2009
CMS on Monday announced that average reimbursements to providers of private Medicare Advantage plans will increase by 3.6% in 2009, the AP/Houston Chronicle reports. CMS, which increased average reimbursements to sponsors of MA plans by 3.5% last year, previously estimated an increase of 3.7% for next year.The reimbursement rate will serve as a benchmark against which MA plan providers offer services, rather than a final payment rate. MA plan providers often offer services for less than the benchmark because they can use a portion of the funds that remain to provide additional benefits, such as vision and dental care, to help increase enrollment. About 22% of Medicare beneficiaries are enrolled in MA plans. UnitedHealth Group and Humana are the largest providers of MA plans, with 14% and 13% shares of the market, respectively (AP/Houston Chronicle, 4/7).
In addition, CMS announced that the deductible for the Medicare prescription drug plans will increase to $295 in 2009 from $275 this year and that the initial coverage limit will increase to $2,700 from $2,510 (CQ HealthBeat, 4/7).
Unions, Consumer Groups Seek Reduction in MA Plan Reimbursements
In related news, AFL-CIO, AFSCME, Families USA and the Medicare Rights Center on Thursday sent a letter to lawmakers that requested a reduction in "excessive corporate subsidies" for MA plan providers. Democrats in Congress since last year have sought to reduce reimbursements for MA plan providers, which receive 13% more in payments than the fee-for-service program for equivalent benefits. Analysts said that such a reduction is unlikely, as President Bush has said that he would veto any legislation that decreased reimbursements for MA plan providers (AP/Houston Chronicle, 4/7).
Forbes Examines Positions of Presidential Candidates on MA
The current issue of Forbes examines how "one of the very few things" on which Democratic presidential candidates Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) and presumptive Republican presidential nominee Sen. John McCain (Ariz.) agree is that MA "has been an expensive boondoggle" and "could face the scalpel of a new administration in Washington." According to Forbes, privatization of Medicare "was once championed as a decent idea for curbing health care inflation," but "opponents counter that the $95 billion budgeted annually for private Medicare is $10 billion more than government-run Medicare would spend." Legislation to reduce reimbursements for MA plan providers has failed in the past, but, "with a new president, that could change," according to Forbes (Whelan, Forbes, 4/21).
