email print share Twitter Digg Yahoo Facebook Delicious Google LinkedIn Reddit StumbleUpon

Avalere Analysis Finds Medicare Advantage Enrollees Face Higher Premiums in 2010

Contact: Lindsey Spindle, 202.207.1337, lspindle@avalerehealth.net

02.19.10

Washington, DC --  Current enrollees in Medicare Advantage Prescription Drug Plans (MA-PDs) will pay, on average, $39.61 per month in 2010, an increase of 14.2 percent compared to 2009, says new analysis by Avalere Health.  In contrast, the average monthly MA-PD premium increased by only 5.2 percent from 2008 to 2009. 

Using recently released data from the Centers for Medicare & Medicaid Services (CMS), Avalere Health estimated the average monthly premium that enrollees in Medicare Advantage Prescription Drug Plans (MA-PDs) will pay in 2010. These estimates are weighted by actual plan enrollment, reflecting the plan choices that the 8.5 million MA-PD enrollees made during the annual election period (November 15 - December 31).

^{Other includes demo and pilot programs, national PACE plans, and cost-based plans.
Analysis excludes employer-only MA-PD plans.
Source: Avalere Health analysis of CMS MA enrollment files from February 2010, February 2009, and May 2008; and  MA/SNP landscape files from 2008-2010.}

Premium increases vary significantly by plan type, with the largest jumps seen in private fee-for-service (PFFS) plans. More than half of all MA-PD enrollees are in health maintenance organizations (HMOs) which had slightly lower premium increases than MA-PD plans overall (11.3 percent), though their premiums still jumped substantially from 2009 to 2010 compared to the 2008 to 2009 increase of only 0.9 percent.

As a result of policies in place when 2010 MA rates were set, most plans’ payments were cut by 3 to 5 percent for 2010. 

According to Avalere’s analysis, there are 2,430 MA-PD plans in 2010, of which 1,705 were also available in 2009. If a beneficiary had remained in the same plan between 2009 and 2010, their premium would have increased on average 22%. The HMO and local PPO increases were each 22%, while the PFFS increase was on average 26%, the SNP increase was on average 29%, and the regional PPO increase was on average 76%.

Doing the same analysis for last plan year, there were 2,748 MA-PD plans in 2009, of which 2,277 were also available in 2008. If a beneficiary had remained in the same plans between 2008 and 2009, their premium would have increased on average 10%.  HMO and SNP premiums were both up an average of 5%, local PPOs were up an average 3%, regional PPOs were down 5%, and PFFS premiums increased 38%.

“Premiums are going up – not just in the individual markets – but also for Medicare Advantage products,” said Lindsey Spindle, a vice president at Avalere Health.  “They fit into a broader trend of increased financial pressure on the insured through rising co-pays and increased premiums.”

Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 170 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

Return to the News Room.