The federal agency had previously announced that the average prescription drug plan premium would be $32 for 2015, an increase of $1 over the current year.
Medicare Advantage plans continue to improve their quality ratings. According to the CMS, approximately 40% of plans offered for 2015 coverage will have at least four stars, a 6% increase over this year. That threshold is important because under the Patient Protection and Affordable Care Act, plans with at least four stars in 2015 will qualify for bonus payments. Previously, plans with three or more stars qualified for bonuses. Roughly 60% of Advantage enrollees are currently in plans with four or more stars.
“A significant portion of revenues are at risk for quality,” said Dan Mendelson, CEO of the Washington-based consulting firm Avalere Health. “You can't operate a profitable Medicare Advantage plan without doing well on the stars.”
Beneficiaries in every state except Alaska can opt for a Medicare Advantage plan in 2015 instead of the traditional fee-for-service program. The choices range from just three plans in Wyoming and North Dakota to more than 200 offerings in California, Florida and New York.
There are fewer disparities in the number of prescription drug plans offered in each state. Medicare beneficiaries in every state and the District of Columbia will have at least 24 plans to choose from.
The ACA included $136 billion in reductions to Medicare Advantage reimbursements rates through 2019, according to the Congressional Budget Office. The cuts were designed to bring the costs of the program more in line with the traditional fee-for-service program.
The CBO predicted that the cuts would lead to 4.8 million fewer Medicare beneficiaries enrolling in private plans. But instead the program has continued to swell, with nearly 5 million more individuals enrolling in Advantage plans since passage of the ACA, according to the Kaiser Family Foundation. Roughly 30% of all Medicare beneficiaries are now enrolled in private plans.
“Medicare Advantage has tremendous momentum right now,” Mendelson said. “I think a lot of it is really fueled by the dysfunction in the fee-for-service delivery system.”
The open enrollment period for Medicare runs from Oct. 15 to Dec. 7.
Follow Paul Demko on Twitter: @MHpdemko
