The nation’s largest healthcare program based on a capitated payment structure is projected to continue growing in 2018, according to data released by the Centers for Medicare and Medicaid Services (CMS). The agency announced that the average monthly premium for Medicare Advantage (MA) plans will decrease and that enrollment will reach a new all-time high of 20.4 million in 2018, a 9% increase over 2017. More than a third of all Medicare enrollees are projected to choose an MA plan in 2018. Unlike traditional Medicare, MA plans are managed by private health plans that commit to covering the cost of care for beneficiaries for a fixed per-enrollee fee from Medicare.
When Congress passed the Affordable Care Act (ACA) in 2010, experts predicted enrollment in MA plans would decline because the ACA reduced federal payments to MA plans over time. ACA also paid bonuses to those that beat benchmarks for quality, and required a medical loss ratio of at least 85%. A 2010 Congressional Budget Office report estimated that enrollment in MA plans would fall by 4.8 million by 2019. However, cuts to MA plans have not been as high as anticipated, and they’re increasingly popular with Medicare beneficiaries.
Hospitals and health systems are paying attention. Earlier this year, Cleveland Clinic announced a deal with insurer Humana to create a $0 premium MA plan in Northeast Ohio for 2018. Participants in the plan will gain access to Cleveland Clinic Health System’s hospitals and physicians.
According to CMS, the number of MA plans available is increasing from about 2,700 to more than 3,100 for 2018, and more than 85% of Medicare beneficiaries will have a choice of 10 or more MA plans in their state.