by Eli Richman | Nov 19, 2018 4:24pm
When the
Medicare Advantage program was created, just 3% of the Medicare population
participated. But both Republicans and Democrats have made policy decisions
that increased enrollment significantly. (Eli Richman/FierceHealthcare)
Medicare Advantage enrollment and spending are
expected to surge over the next decade, until more than 4 in 10 beneficiaries are in the
program by 2028.
The MA enrollment rate
is set to grow from 34% in 2018 to 42% over the next 10 years. As the share of
the population on MA grows, public perception of Medicare could shift
significantly, according to the New England Journal of Medicine (NEJM).
"The Medicare of
tomorrow could look much different than it does today—more like a marketplace
of private plans, with a backup public plan, and less like a national insurance
program. This may or may not be the program that people envision when they talk
about Medicare for All," NEJM authors wrote in a recent report.
Beneficiaries have
grown fond of MA plans due to their strong financial protections and the extra
benefits they provide, like dental care and gym memberships. Yet those extra
benefits are also set to take a toll on taxpayers.
Spending on MA
beneficiaries is expected to almost triple, from $206 billion in 2018 to
$584 billion in 2028, according to projections from the Congressional Budget Office (PDF).
NEJM suggested that this public spending could become a more political issue as
spending spikes, even though the plans are popular.
"Policymakers
could face tough choices in the future as they seek to balance competing
demands to reduce the growth in Medicare spending and also provide plan choice
and extra benefits," the authors wrote. "To achieve savings, they
could, for example, reduce plan bonus payments and rebates. … Striking the
right balance in payment policy from the perspective of beneficiaries,
insurers, and the federal government is likely to remain a considerable
challenge."
Insurers like UnitedHealthcare, Aetna and Anthem have reported huge windfalls from the government
program that is administered by private plans. And new regulatory flexibilities
have CEOs bullish about the future. The program is also attracting new startups
like Oscar Health and Devoted Health.
Over the past decade,
the program has grown from 21% of Medicare beneficiaries to 34%. But
inequity issues are also likely to become more acute as MA enrollment grows, as
not everyone has the same access to the same plans. Among other things, MA
tends to have a smaller footprint in rural areas, according to NEJM, so
beneficiaries in those areas are also more likely to be on traditional
Medicare.
These disparities can
be problematic not just because of the extra benefits MA plans provide but
also because of their financial protections. Unlike traditional Medicare, MA
plans are required by CMS to have an out-of-pocket limit; in 2018, the average
enrollee had an annual limit of $5,215. This can make a huge difference to
seniors, many of whom live on fixed incomes with high healthcare costs.
"More than
one-third of all beneficiaries in traditional Medicare spent at least 20% of
their per capita income on out-of-pocket health-related costs in 2013,"
NEJM wrote. "In addition, Medicare Advantage plans offer the convenience
of one-stop shopping by covering all Medicare benefits; in contrast, most
beneficiaries in traditional Medicare have wraparound supplemental
coverage."
As a result
of these changing expectations, future policymakers may either have to alter
access to MA plans or change the benefits incorporated in traditional Medicare,
NEJM suggested.
https://www.fiercehealthcare.com/payer/4-10-medicare-enrollees-expected-to-be-medicare-advantage-by-2028?_lrsc=38734db9-424d-4943-889f-ff243d91c1d6&utm_source=Elevate&utm_medium=social&utm_campaign=Associates
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