Four years after passage of the federal healthcare law, benefits and premiums for Medicare Advantage plans in New York are largely unchanged, according to an analysis (PDF) conducted by the Medicare Rights Center.
In addition, enrollment in private Medicare plans continues to grow, with 1.14 million New Yorkers, or 35% of all beneficiaries, opting for such coverage. That's up from 30% in 2012.
Insurers had predicted dire consequences if cuts that were included in the Patient Protection and Affordable Care Act were enacted. The federal healthcare law slashes at least $136 billion in payments from the private Medicare program over the course of a decade. America’s Health Insurance Plans, the main industry group, puts the cuts at more than $200 billion.
But the Medicare Rights Center found little evidence that there had been any significant changes in benefits or premiums since the law was enacted. The not-for-profit consumer advocacy group scrutinized seven plans offered in New York’s marketplace, including products from the two most popular Medicare insurers in the state, UnitedHealthcare and EmblemHealth.
For the AARP MedicareComplete Essential plan, which is offered by UnitedHealthcare, it found that premiums and out-of-pocket caps were unchanged between 2011 and 2014. However, the majority of co-payments were raised in 2014.
Similarly, monthly premiums for a PPO plan offered by Humana increased from $21 to $24 between 2011 and 2014. But co-payments for some services, such as dialysis equipment, decreased.
“The changes that we have seen in the past four years have been consistent with the changes that we heard about for people enrolled in Medicare Advantage plans prior to that,” said Casey Schwarz, policy and client services counsel at the Medicare Rights Center. “They’ve always been a changeable product.”
In a separate analysis, the United Hospital Fund found that the average premium increase for Medicare Advantage plans in New York between 2010 and 2012 was just 3.9%. During the same period, medical expenses climbed by an average of 4.8% for Medicare Advantage customers. In addition, the profitability for health plans dropped from $56.70 per member per month in 2010 to $49.53 in 2012—a 12.6% decrease.
Traditionally, the federal government has paid significantly more to cover individuals in Medicare Advantage plans than for their counterparts in the traditional fee-for-service program. The cuts in the ACA were designed to more closely align the costs of the programs. In 2014, the average Medicare Advantage beneficiary costs 106% as much as enrollees in the traditional Medicare program, according to the Medicare Payment Advisory Commission (PDF).
The Medicare Advantage rolls continue to swell nationwide. Roughly a third of all Medicare beneficiaries now opt for private plans. Enrollments are up by more than 1 million so far this year, according to a recent analysis of the CMS data by Barclays.
“On the merits there was a need to restrain the rates somewhat,” said Peter Newell, health insurance project director at the United Hospital Fund. “I think this is still business that’s important to the plans and valuable to them.”
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