Under the Patient Protection and Affordable Care Act, Medicare payments to Advantage plans last year began to depend on the correlation between their bids and fee-for-service costs in individual counties, though payments to plans can also increase based on quality of service provided. While 2011 payments were held at 2010 levels, the maximum amount a plan could be paid by Medicare began to go down in 2012.
The Kaiser and Mathematic researchers found that the changes didn't negatively affect enrollment in Advantage plans. “There is little evidence of an adverse effect on enrollment in low- versus high-cost counties,” the study says.
Still, only 28% of Medicare beneficiaries are enrolled in an Advantage plan, up just one percentage point for 2012. The state with the highest enrollment in the program is Minnesota, with 49%. Alaska and Wyoming had the lowest Advantage penetration among beneficiaries, with 3% each.
Another key finding in the report is that enrollment in the plans is largely concentrated among certain insurers, including Blue Cross and Blue Shield affiliates. Five carriers control about two-thirds of Advantage enrollment.
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