Primarily because of better health care coordination, Medicare Advantage plans across the country are lowering overall costs and providing substantial savings for beneficiaries. The benefits from the plans include the use of proven approaches to keep beneficiaries healthy and avoid complications from chronic diseases.
Enrollment information from the new prescription drug benefit shows that these extra savings extend to prescription drug coverage:
More than half of beneficiaries choosing a Medicare Advantage plan with prescription drugs have enrolled in a plan with no premium for their drug coverage. Seventy percent of Medicare beneficiaries have the option of choosing a Medicare Advantage plan that does not require the beneficiary to pay a premium for their prescription drug coverage.
Almost three-fourths of beneficiaries who have enrolled in Medicare Advantage plans with drugs are receiving coverage that has extra benefits beyond the basic Medicare prescription drug coverage, such as lower deductibles and coverage in the "coverage gap."
"Medicare Advantage plans are providing enhanced drug coverage at a low cost, as well as other enhanced benefits, contributing to average savings of about $100 a month for seniors," said CMS Administrator Mark B. McClellan, M.D., Ph.D. "With better benefits more widely available than ever before, a million more people with Medicare have already chosen to get their coverage through Medicare Advantage."
Nearly 7 million beneficiaries are currently enrolled in Medicare Advantage plans, including both Medicare Advantage-only plans and Medicare Advantage-Prescription Drug plans that include Medicare prescription drug benefits. Enrollment in Medicare Advantage has increased by about 1 million since enrollment in the drug benefit began. About 5.7 million beneficiaries in Medicare Advantage receive Medicare prescription coverage through Medicare Advantage-Prescription Drug plans.
The Centers for Medicare & Medicaid Services (CMS) today announced an average Medicare Advantage rate increase of approximately 4 percent for 2007. The average rate increase is the result of several factors used to determine annual increases in Medicare Advantage payment rates, including the current year growth in Medicare costs for all Medicare beneficiaries of 3.6 percent (mainly due to growth in costs for beneficiaries in fee-for-service Medicare) and the phase out of the "budget neutrality" adjustment in Medicare Advantage payments. These factors are described in more detail in the accompanying Fact Sheet.
Assuming that a given plan's risk score in 2015 is approximately the same as in 2006, we expect the plan's payments will increase, on average, by approximately 1.1 percent after the adjustment for fee-for-service normalization.
"Medicare Advantage plans are providing better benefits for people with Medicare, and will do so in 2015 with payment increases that are less than expenditure growth in fee-for-service Medicare. Medicare Advantage plans are receiving more payments from beneficiaries with chronic diseases and high expected costs. These seniors often have the most to gain from the better drug coverage, care management services, and additional benefits in Medicare Advantage plans."
The final estimate of 7.1 percent for 2015 for the National Per Capita Medicare Advantage Growth Percentage for aged and disabled beneficiaries combined was calculated by compounding the 2015 trend change of 3.6 percent for Medicare spending and 3.4 percent for prior year's adjustments when spending increased more than previously estimated. The Medicare trend increase and the related revisions for earlier underestimates or overestimates of the growth trend are actuarial calculations based on actual Medicare spending and are required by the Medicare law.
