Advantage plan premiums fall; enrollment rises: GAO

Medicare Advantage premiums fell while enrollment in the program rose from 2010 to 2011, according to a report from the Government Accountability Office (PDF).

The report's findings showed that between April 2010 and April 2011, enrollment in MA plans increased by about 6% to 8.4 million beneficiaries from 7.9 million, with enrollment in HMOs accounting for about two-thirds of total enrollment. Local and regional PPOs account for a smaller portion of total enrollment, the report said, but these plans experienced the highest percentage growth, as local PPO enrollment increased by 38% and regional PPO enrollment increased by 58%. Meanwhile, private fee-for-service (PFFS) plans saw a 54% decline in enrollment, which analysts concluded was most likely because of requirements that PFFS plans establish provider networks beginning in 2011.

“Even with the increase in enrollment from April 2010 through April 2011, the number of MA plans decreased from 2,307 to 1,964, and this was due primarily to a decrease in PFFS plan offerings, from 435 plans to 239,” the report noted.

The study also said the average monthly premium for beneficiaries in MA plans fell to $24 in 2011 from $28 in 2010, reflecting a 14% decrease. And for the most part, beneficiaries received coverage for additional benefits at similar levels in 2010 and 2011, as the report showed at least 64% of beneficiaries were in plans that provided hearing and vision benefits in both years.

“HHS did not comment directly on our results for 2010 and 2011,” the report noted. “However, HHS stated that MA premiums would be 4% lower, on average, in 2012 compared to 2011 but that 2012 benefits would remain consistent with those offered in 2011,” it continued. “HHS also stated that MA plans projected that enrollment would be 10 percent higher in 2012 than in 2011.”