Medicare Advantage
Enrollment Increased from 2010 to 2011 while Premiums Decreased and Benefit Packages Were Stable Gao ID: GAO-12-93 October 31, 2011Enrollment and spending in Medicare Advantage (MA) plans--the private plan alternative to the Medicare fee-for- service (FFS) program--have more than doubled since 2004. MA plans generally receive larger payments from Medicare than what these plans would require to provide the original Medicare FFS benefit package. Plans must use this additional money to reduce cost sharing, reduce premiums, and offer additional benefits. The Patient Protection and Affordable Care Act, enacted in 2010, required that the Centers for Medicare & Medicaid Services (CMS)--the agency within the Department of Health and Human Services (HHS) that administers Medicare--make changes in how Medicare pays MA plans. These changes, once fully implemented, are expected to reduce MA enrollment and payments, and lead to less generous benefit packages. GAO was asked to examine trends in MA from 2010 to 2011. This study assesses the extent to which the following changed from 2010 to 2011: (1) MA enrollment, (2) MA premiums and cost-sharing requirements, and (3) the additional benefits offered by MA plans. GAO analyzed data for the most common types of MA plans, accounting for about 71 percent of both the 11.1 million MA beneficiaries in April 2010 and the 11.8 million MA beneficiaries in April 2011. GAO used MA enrollment data to identify enrollment trends. GAO also analyzed data on MA plans' projected revenue requirements and benefit packages. GAO assessed the reliability of the data by interviewing CMS officials, conducting logic tests, and comparing results to published sources.
Enrollment in the MA plans GAO analyzed increased by about 6 percent--from 7.9 million to 8.4 million beneficiaries--from April 2010 through April 2011. There was substantial variation by plan type in enrollment levels and how they changed from 2010 to 2011. Enrollment in health maintenance organizations (HMO), which account for about two-thirds of total MA enrollment in 2011, increased by about 9 percent, from about 5.2 million beneficiaries to about 5.6 million beneficiaries. Local and regional preferred provider organizations (PPO), which comprise a much smaller portion of total MA enrollment, experienced the highest percentage growth in enrollment--local PPOs increased by 38 percent and regional PPOs increased by 58 percent. In contrast, private fee-for-service (PFFS) plans experienced a 54 percent decline in enrollment, which was likely due to requirements that most PFFS plans establish provider networks beginning in 2011. Even with the increase in enrollment from April 2010 through April 2011, the number of MA plans decreased from 2,307 to 1,964, and this was due primarily to a decrease in PFFS plan offerings, from 435 plans to 239. The average monthly premium for beneficiaries in MA plans decreased from $28 in 2010 to $24 in 2011, about a 14 percent reduction. The extent of the reduction and the premium amount varied substantially among plan types. For example, the average monthly premium for beneficiaries in PFFS plans fell from $33 in 2010 to $26 in 2011, about 21 percent, while the average monthly premium for beneficiaries in HMOs fell from $25 in 2010 to $23 in 2011, about 8 percent. In information MA plans submitted to CMS prior to the contract year, MA plans projected that their cost-sharing requirements would be about half of the level in Medicare FFS in both 2010 and 2011. In both years HMOs had the lowest cost-sharing requirements--40 to 42 percent of the Medicare FFS average, while regional PPOs had the highest cost-sharing requirements--about 76 to 77 percent of the Medicare FFS average. In addition, from 2010 to 2011, the percent of MA beneficiaries in plans with limits on beneficiaries' out-of-pocket health care costs increased from 74 percent to 100 percent. This increase is not surprising given that, effective in 2011, CMS requires all MA plans to have such limits, called out-of-pocket maximums. In contrast, Medicare FFS does not have an out-of-pocket maximum. MA beneficiaries generally received coverage for additional benefits at similar levels in 2010 and 2011. For example, at least 64 percent of beneficiaries were in plans providing benefits such as hearing and vision in both 2010 and 2011. There were some changes, however, in the percentage of beneficiaries with certain benefits. For example, the percentage of MA beneficiaries with coverage for vision services decreased from 84 percent to 79 percent, while the percentage of MA beneficiaries with outpatient blood benefits beyond what Medicare FFS covers increased from 87 to 91 percent. GAO obtained comments on a draft of this report from HHS.
GAO-12-93, Medicare Advantage: Enrollment Increased from 2010 to 2011 while Premiums Decreased and Benefit Packages Were Stable
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
October 2011:
Medicare Advantage Benefits:
Enrollment Increased from 2010 to 2011 while Premiums Decreased and
Benefit Packages Were Stable:
GAO-12-93:
GAO Highlights:
Highlights of [hyperlink, http://www.gao.gov/products/GAO-12-93], a
report to congressional requesters.
Why GAO Did This Study:
Enrollment and spending in Medicare Advantage (MA) plans”the private
plan alternative to the Medicare fee-for-service (FFS) program”have
more than doubled since 2004. MA plans generally receive larger
payments from Medicare than what these plans would require to provide
the original Medicare FFS benefit package. Plans must use this
additional money to reduce cost sharing, reduce premiums, and offer
additional benefits. The Patient Protection and Affordable Care Act,
enacted in 2010, required that the Centers for Medicare & Medicaid
Services (CMS)”the agency within the Department of Health and Human
Services (HHS) that administers Medicare”make changes in how Medicare
pays MA plans. These changes, once fully implemented, are expected to
reduce MA enrollment and payments, and lead to less generous benefit
packages. GAO was asked to examine trends in MA from 2010 to 2011. This
study assesses the extent to which the following changed from 2010 to
2011: (1) MA enrollment, (2) MA premiums and cost-sharing requirements,
and (3) the additional benefits offered by MA plans. GAO analyzed data
for the most common types of MA plans, accounting for about 71 percent
of both the 11.1 million MA beneficiaries in April 2010 and the 11.8
million MA beneficiaries in April 2011. GAO used MA enrollment data to
identify enrollment trends. GAO also analyzed data on MA plans‘
projected revenue requirements and benefit packages. GAO assessed the
reliability of the data by interviewing CMS officials, conducting logic
tests, and comparing results to published sources.
What GAO Found:
Enrollment in the MA plans GAO analyzed increased by about 6 percent”
from 7.9 million to 8.4 million beneficiaries”from April 2010 through
April 2011. There was substantial variation by plan type in enrollment
levels and how they changed from 2010 to 2011. Enrollment in health
maintenance organizations (HMO), which account for about two-thirds of
total MA enrollment in 2011, increased by about 9 percent, from about
5.2 million beneficiaries to about 5.6 million beneficiaries. Local and
regional preferred provider organizations (PPO), which comprise a much
smaller portion of total MA enrollment, experienced the highest
percentage growth in enrollment”local PPOs increased by 38 percent and
regional PPOs increased by 58 percent. In contrast, private fee-for-
service (PFFS) plans experienced a 54 percent decline in enrollment,
which was likely due to requirements that most PFFS plans establish
provider networks beginning in 2011. Even with the increase in
enrollment from April 2010 through April 2011, the number of MA plans
decreased from 2,307 to 1,964, and this was due primarily to a decrease
in PFFS plan offerings, from 435 plans to 239.
The average monthly premium for beneficiaries in MA plans decreased
from $28 in 2010 to $24 in 2011, about a 14 percent reduction. The
extent of the reduction and the premium amount varied substantially
among plan types. For example, the average monthly premium for
beneficiaries in PFFS plans fell from $33 in 2010 to $26 in 2011, about
21 percent, while the average monthly premium for beneficiaries in HMOs
fell from $25 in 2010 to $23 in 2011, about 8 percent. In information
MA plans submitted to CMS prior to the contract year, MA plans
projected that their cost-sharing requirements would be about half of
the level in Medicare FFS in both 2010 and 2011. In both years HMOs had
the lowest cost-sharing requirements”40 to 42 percent of the Medicare
FFS average, while regional PPOs had the highest cost-sharing
requirements”about 76 to 77 percent of the Medicare FFS average. In
addition, from 2010 to 2011, the percent of MA beneficiaries in plans
with limits on beneficiaries‘ out-of-pocket health care costs increased
from 74 percent to 100 percent. This increase is not surprising given
that, effective in 2011, CMS requires all MA plans to have such limits,
called out-of-pocket maximums. In contrast, Medicare FFS does not have
an out-of-pocket maximum.
MA beneficiaries generally received coverage for additional benefits at
similar levels in 2010 and 2011. For example, at least 64 percent of
beneficiaries were in plans providing benefits such as hearing and
vision in both 2010 and 2011. There were some changes, however, in the
percentage of beneficiaries with certain benefits. For example, the
percentage of MA beneficiaries with coverage for vision services
decreased from 84 percent to 79 percent, while the percentage of MA
beneficiaries with outpatient blood benefits beyond what Medicare FFS
covers increased from 87 to 91 percent.
GAO obtained comments on a draft of this report from HHS.
View [hyperlink, http://www.gao.gov/products/GAO-12-93] or key
components. For more information, contact James Cosgrove at (202) 512-
7114 or cosgrovej@gao.gov.
[End of section]
Contents:
Letter:
Background:
MA Plan Enrollment Increased by about 6 Percent from 2010 to 2011:
Average MA Premiums Decreased from 2010 to 2011, and Projected Cost
Sharing Was Stable:
MA Plans' Coverage of Additional Benefits Was Generally Similar in 2010
and 2011:
Agency Comments:
Appendix I: MA Beneficiaries Receiving Coverage for Additional Benefits
by Plan Type, 2010 and 2011:
Appendix II: Comments from the Department of Health and Human Services:
Appendix III: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Percent of MA Beneficiaries in Plans that Offered Additional
Benefits in 2010 and 2011, by Plan Type:
Figures:
Figure 1: MA Enrollment in 2010 and 2011, by Plan Type:
Figure 2: Average Premium Charged by MA Plans in 2010 and 2011, by Plan
Type:
Figure 3: Average Projected Cost Sharing for MA Beneficiaries Compared
to Their Cost Sharing in Medicare FFS, 2010 and 2011:
Figure 4: MA Beneficiaries' Out-of-Pocket Maximum by Plan Type, 2010
and 2011:
Figure 5: MA Beneficiaries in Plans that Offered Additional Benefits,
2010 and 2011:
Abbreviations:
CMS: Centers for Medicare & Medicaid Services:
FFS: fee-for-service:
HHS: Department of Health and Human Services:
HMO: health maintenance organization:
MA: Medicare Advantage:
MedPAC: Medicare Payment Advisory Commission:
PPACA: Patient Protection and Affordable Care Act:
PFFS: private fee-for-service:
PPO: preferred provider organization:
PSO: provider-sponsored organization:
SNP: special needs plan:
[End of section]
October 31, 2011:
The Honorable Max Baucus:
Chairman:
Committee on Finance:
United States Senate:
The Honorable Tom Harkin:
Chairman:
Committee on Health, Education, Labor and Pensions:
United States Senate:
Enrollment and spending in Medicare Advantage (MA) plans have more than
doubled since 2004 and accounted for about 11.1 million beneficiaries
and $115 billion in 2010.[Footnote 1] The MA program is Medicare's
private plan alternative to the original Medicare fee-for-service (FFS)
program in which MA plans provide health care coverage to Medicare
beneficiaries. MA plans generally receive larger payments from Medicare
than what these plans would require to provide the original Medicare
FFS benefit package. Plans must use this additional money to reduce
premiums, reduce cost sharing, and offer additional benefits.
The Patient Protection and Affordable Care Act (PPACA), enacted in
2010, required changes in how MA plan payments are set.[Footnote 2] The
Congressional Budget Office projected that these changes would reduce
Medicare payments to MA plans by $136 billion[Footnote 3] and decrease
enrollment by about 35 percent through 2019. [Footnote 4] In addition,
the Office of the Actuary of the Centers for Medicare & Medicaid
Services (CMS) within the Department of Health and Human Services (HHS)
determined that the reduction in payments to MA plans required by PPACA
would eventually lead to MA plans offering benefit packages that are
less generous than what is currently provided to
beneficiaries.[Footnote 5] However, it is uncertain what impact, if
any, these payment changes have had thus far on MA plan enrollment, the
premiums and cost sharing they require from beneficiaries, and the
additional benefits they offer. You asked us to examine these issues.
This study assesses the extent to which the following changed from 2010
to 2011: (1) MA enrollment, (2) MA premiums and cost-sharing
requirements, and (3) the additional benefits offered by MA plans.
To assess the extent to which MA enrollment changed from 2010 to 2011,
we used MA enrollment data for April of each year that we obtained from
CMS. We focused our analysis on the following types of MA plans: health
maintenance organizations (HMO), local preferred provider organizations
(PPO), regional PPOs, and private fee-for-service (PFFS)
plans.[Footnote 6] We excluded one type of MA plan--medical savings
accounts, which accounted for about 600 beneficiaries in 2010 and about
1,500 beneficiaries in 2011, because they operate differently than
other MA plans.[Footnote 7] In addition, we excluded plans that only
provided Medicare Part B benefits and plans that restricted enrollment
to members of an employer group or to beneficiaries with certain health
conditions or needs--called special needs plans (SNP).[Footnote 8]
After implementing these exclusions, our analysis included about 71
percent of both the 11.1 million MA beneficiaries in April 2010 and the
11.8 million MA beneficiaries in April 2011.
To assess the extent to which MA premiums and cost-sharing requirements
changed from 2010 to 2011, we used two data sources: (1) Bid Pricing
Tool data, which contain information MA plans submitted to CMS on their
projected revenue requirements for providing Medicare-covered services
to enrolled beneficiaries; and (2) data on plan benefit packages. We
used the bid data to calculate MA plans' average premium. For purposes
of this report, the term MA plan premium applies to health benefits and
excludes Part D coverage, unless otherwise noted. We also used the bid
data to calculate plans' projected total cost sharing for beneficiaries
as a percentage of projected cost sharing for these beneficiaries had
they remained in Medicare FFS. Because our cost-sharing analysis is
based on plans' projections for 2010 and 2011, our results may differ
from plans' actual experience during these years. We obtained
information on plans' out-of-pocket maximums from the benefit package
data.[Footnote 9] For plans with an out-of-pocket maximum for in-
network services and also one for combined in-and out-of-network
services, we used the lower value for this analysis.
To assess the extent to which the additional benefits MA plans offered
changed from 2010 to 2011, we analyzed the benefit package data. We
focused on the categories of additional benefits that were most
commonly offered by MA plans and that were available to all plan
beneficiaries.[Footnote 10] We weighted results for all of our analyses
by each plan's enrollment in April of 2010 or 2011. We assessed the
reliability of the MA plan enrollment, bid, and benefit package data by
interviewing CMS officials, conducting logic tests, and comparing our
results to published sources.
We conducted this performance audit from February 2011 through October
2011 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings based on our audit objectives.
Background:
MA plans must offer benefits covered under Medicare FFS, which consist
of Part A and Part B-covered services, except hospice care. MA plans
also have the option of offering health benefits, such as dental and
vision coverage, beyond what is included in the Medicare FFS benefit
package. MA plans may charge a monthly premium to cover the health
benefits they offer, although many do not. In addition to health
benefits, MA plans generally offer Part D prescription drug coverage,
for which they may charge an additional premium.
MA plans, like Medicare FFS, can require that beneficiaries pay cost
sharing when they receive medical services.[Footnote 11] CMS permits MA
plans to have cost-sharing requirements that differ from Medicare
FFS.[Footnote 12] However, CMS requires that an MA plan's projected
total cost sharing, on average, be no greater than the projected amount
for beneficiaries in Medicare FFS.[Footnote 13] CMS also requires that,
beginning in 2011, plans establish limits on the amount a beneficiary
spends on cost sharing in a given year, called out-of-pocket maximums.
These limits provide financial protection to beneficiaries who
otherwise would have higher cost-sharing expenses. In contrast to MA
plans, Medicare FFS does not have an out-of-pocket maximum.
Medicare pays MA plans a monthly amount to provide health coverage for
enrolled beneficiaries. CMS determines this amount based on a plan's
bid--the plan's projected cost of providing Medicare Part A and Part B
benefits--in relation to a benchmark, which is the maximum amount the
Medicare program will pay MA plans in a given locality.[Footnote 14] If
an MA plan's bid exceeds the benchmark, the plan must charge each of
its beneficiaries an additional premium to make up the difference. If a
plan's bid is less than the benchmark, 75 percent of the difference is
returned to the plan as a rebate, which must be used to reduce
premiums, reduce cost sharing, or provide additional benefits.[Footnote
15] Because the benchmarks are generally greater than spending in FFS,
even plans that bid below FFS spending levels in their service areas
are paid above FFS spending amounts.
PPACA required CMS to change the way Medicare pays MA plans by revising
plan benchmarks and rebates and by linking these payments to the
quality of care that MA plans provide. In 2011, rather than increasing
benchmarks annually as in previous years, they were frozen at 2010
levels.[Footnote 16] Revised benchmarks will be phased in over a 2-to 6-
year period beginning in 2012. These benchmarks will be lower, on
average, and are designed to align more closely with Medicare FFS
spending.[Footnote 17] PPACA also phases in reduced MA plan rebates
from 2012 through 2014 and varies rebate amounts based on CMS's
assessments of plan quality.[Footnote 18] Finally, PPACA required that,
beginning in 2012, CMS increase payments to MA plans with quality
ratings above a certain threshold, with higher quality plans receiving
greater increases and the lowest quality plans receiving no
increase.[Footnote 19]
MA Plan Enrollment Increased by about 6 Percent from 2010 to 2011:
Enrollment in the MA plans we analyzed increased by about 6 percent--
from 7.9 million beneficiaries in April 2010 to 8.4 million
beneficiaries in April 2011--and enrollment growth varied substantially
by MA plan type. HMOs, which account for about two-thirds of total MA
enrollment in 2011, increased by about 9 percent, from about 5.2
million beneficiaries to about 5.6 million beneficiaries (see fig. 1).
Local and regional PPOs, which comprise a much smaller portion of total
MA enrollment compared to HMOs, experienced the highest percentage
growth in enrollment--local PPOs increased by 38 percent and regional
PPOs increased by 58 percent. In contrast, PFFS plans experienced a 54
percent decline in enrollment, which was likely due to requirements
that most PFFS plans establish provider networks beginning in
2011.[Footnote 20]
Figure 1: MA Enrollment in 2010 and 2011, by Plan Type:
[Refer to PDF for image: vertical bar graph]
Plan type: All plans;
2010: Number of beneficiaries in thousands: 7,921;
2010: Number of plans: 2,307;
2011: Number of beneficiaries in thousands: 8,364;
2011: Number of plans: 1,964.
Plan type: HMO;
2010: Number of beneficiaries in thousands: 5,155;
2010: Number of plans: 1,279;
2011: Number of beneficiaries in thousands: 5,629;
2011: Number of plans: 1,127.
Plan type: Local PPO;
2010: Number of beneficiaries in thousands: 989;
2010: Number of plans: 527;
2011: Number of beneficiaries in thousands: 1,361;
2011: Number of plans: 533.
Plan type: Regional PPO;
2010: Number of beneficiaries in thousands: 484;
2010: Number of plans: 59;
2011: Number of beneficiaries in thousands: 763;
2011: Number of plans: 59.
Plan type: PFFS;
2010: Number of beneficiaries in thousands: 1,271;
2010: Number of plans: 435;
2011: Number of beneficiaries in thousands: 582;
2011: Number of plans: 239.
Source: GAO analysis of CMS data on MA enrollment in April 2010 and
April 2011.
Notes: The "All plans" category includes PSOs in addition to the other
types of MA plans shown above. Results are not reported separately for
PSOs because these plans constituted less than 1 percent of total
enrollment in 2010 and 2011. We excluded the following types of plans
from our analysis: employer plans, Part B-only plans, SNPs, Program of
All Inclusive Care for the Elderly plans, demonstration plans, and cost
plans.
[End of figure]
Despite the increase in enrollment from April 2010 through April 2011,
the number of MA plans decreased from 2,307 to 1,964. Most of this
reduction was a decrease in PFFS plan offerings, from 435 plans to 239.
CMS officials told us that about 75 percent of the beneficiaries in MA
plans that were not renewed in 2011 were in PFFS plans. The number of
HMO plans also decreased--from 1,279 in 2010 to 1,127 in 2011, which in
part may be due to CMS's efforts to simplify MA plan offerings by
eliminating potentially duplicative plans and those with low
enrollment.[Footnote 21] According to CMS officials, 84 plans with low
enrollment were either consolidated with other plans or
eliminated.[Footnote 22] CMS officials identified and encouraged MA
plan sponsors to consolidate potentially duplicative plans so that
beneficiaries would more easily be able to differentiate among MA plans
offered and select the plan that best meets their needs.
Average MA Premiums Decreased from 2010 to 2011, and Projected Cost
Sharing Was Stable:
The average monthly premium for beneficiaries in MA plans decreased
from $28 in 2010 to $24 in 2011.[Footnote 23] This was about a 14
percent reduction in the average monthly premium (see fig. 2).[Footnote
24] The extent of the reduction and the premium amount varied
substantially among plan types. For example, the average monthly
premium for beneficiaries in PFFS plans fell by about 21 percent from
2010 to 2011, while the average monthly premium for beneficiaries in
HMOs fell by about 8 percent. In 2011, beneficiaries in local PPOs
continued to pay over twice as much for their monthly premium as
beneficiaries in regional PPOs.
Figure 2: Average Premium Charged by MA Plans in 2010 and 2011, by Plan
Type:
[Refer to PDF for image: vertical bar graph]
Average premium (in dollars).
Plan type: All plans;
2010: $28;
2011: $24.
Plan type: HMO;
2010: $25;
2011: $23.
Plan type: Local PPO;
2010: $42;
2011: $37.
Plan type: Regional PPO;
2010: $18;
2011: $12.
Plan type: PFFS;
2010: $33;
2011: $26.
Source: GAO analysis of 2010 and 2011 CMS Bid Pricing Tool and
enrollment data.
Notes: Results are weighted by plan enrollment in April of each year.
Average premium amounts are for health benefits and do not include
premiums for Part D prescription drug coverage. Results are based on
all plans in the analysis, including plans that do not charge a
premium. The "All plans" category includes PSOs in addition to the
other types of MA plans shown above. Results are not reported
separately for PSOs because these plans constituted less than 1 percent
of total enrollment in 2010 and 2011. We excluded the following types
of plans from our analysis: employer plans, Part B-only plans, SNPs,
Program of All Inclusive Care for the Elderly plans, demonstration
plans, and cost plans.
[End of figure]
MA plans projected that their cost-sharing requirements would be about
half of the level in Medicare FFS in both 2010 and 2011.[Footnote 25]
Cost sharing was generally stable across plan types, with at most a 5
percentage point change from 2010 to 2011, but the level of cost
sharing varied substantially (see fig. 3). For example, in both years
HMOs had the lowest cost-sharing requirement--40 to 42 percent of the
Medicare FFS average--and regional PPOs had the highest cost-sharing
requirement--76 to 77 percent of the average in Medicare FFS. In both
2010 and 2011, most of the funding that MA plans used to pay for lower
cost sharing than Medicare FFS was from Medicare rebates, with the
remainder coming from additional beneficiary premiums.[Footnote 26]
Figure 3: Average Projected Cost Sharing for MA Beneficiaries Compared
to Their Cost Sharing in Medicare FFS, 2010 and 2011:
[Refer to PDF for image: vertical bar graph]
Plan type: All plans;
2010: Percentage of Medicare FFS cost sharing: 48%;
2010: Projected Medicare FFS cost sharing in dollars: $118;
2011: Percentage of Medicare FFS cost sharing: 48%;
2011: Projected Medicare FFS cost sharing in dollars: $121.
Plan type: HMO;
2010: Percentage of Medicare FFS cost sharing: 42%;
2010: Projected Medicare FFS cost sharing in dollars: $123;
2011: Percentage of Medicare FFS cost sharing: 40%;
2011: Projected Medicare FFS cost sharing in dollars: $125.
Plan type: Local PPO;
2010: Percentage of Medicare FFS cost sharing: 53%;
2010: Projected Medicare FFS cost sharing in dollars: $110;
2011: Percentage of Medicare FFS cost sharing: 58%;
2011: Projected Medicare FFS cost sharing in dollars: $112.
Plan type: Regional PPO;
2010: Percentage of Medicare FFS cost sharing: 77%;
2010: Projected Medicare FFS cost sharing in dollars: $114;
2011: Percentage of Medicare FFS cost sharing: 76%;
2011: Projected Medicare FFS cost sharing in dollars: $114.
Plan type: PFFS;
2010: Percentage of Medicare FFS cost sharing: 63%;
2010: Projected Medicare FFS cost sharing in dollars: $106;
2011: Percentage of Medicare FFS cost sharing: 66%;
2011: Projected Medicare FFS cost sharing in dollars: $109.
Source: GAO analysis of 2010 and 2011 CMS Bid Pricing Tool and
enrollment data.
Notes: Results are weighted by plan enrollment in April of each year.
The "All plans" category includes PSOs in addition to the other types
of MA plans shown above. Results are not reported separately for PSOs
because these plans constituted less than 1 percent of total enrollment
in 2010 and 2011. We excluded the following types of plans from our
analysis: employer plans, Part B-only plans, SNPs, Program of All
Inclusive Care for the Elderly plans, demonstration plans, and cost
plans.
[End of figure]
From 2010 to 2011, the percent of MA beneficiaries in plans with an out-
of-pocket maximum increased from 74 percent to 100 percent. This
increase is not surprising given that, effective in 2011, CMS requires
all MA plans to have an out-of-pocket maximum.[Footnote 27] The
proportion of MA beneficiaries in plans with out-of-pocket maximums at
or below $3,400 also increased--from 47 percent in 2010 to 52 percent
in 2011 (see fig. 4).[Footnote 28] In 2011, MA beneficiaries in
Regional PPOs and PFFS plans were more likely than MA beneficiaries in
HMOs or local PPOs to be enrolled in plans with out-of-pocket maximums
between $3,401 to $6,700. Unlike MA plans, Medicare FFS does not limit
beneficiaries' out-of-pocket costs.
Figure 4: MA Beneficiaries' Out-of-Pocket Maximum by Plan Type, 2010
and 2011:
[Refer to PDF for image: vertical bar graph]
Plan type: All Plans;
2010: Overall out-of-pocket maximum of greater than $6,700: 2%;
2010: Overall out-of-pocket maximum of $3,401 to $6,700: 25%;
2010: Overall out-of-pocket maximum of $3,400 or less: 47%;
2010: No overall out-of-pocket maximum: 26%;
2011: Overall out-of-pocket maximum of greater than $6,700: 0;
2011: Overall out-of-pocket maximum of $3,401 to $6,700: 48%;
2011: Overall out-of-pocket maximum of $3,400 or less: 52%;
2011: No overall out-of-pocket maximum: 0.
Plan type: HMO;
2010: Overall out-of-pocket maximum of greater than $6,700: 2%;
2010: Overall out-of-pocket maximum of $3,401 to $6,700: 12%;
2010: Overall out-of-pocket maximum of $3,400 or less: 50%;
2010: No overall out-of-pocket maximum: 36%;
2011: Overall out-of-pocket maximum of greater than $6,700: 0;
2011: Overall out-of-pocket maximum of $3,401 to $6,700: 42%;
2011: Overall out-of-pocket maximum of $3,400 or less: 58%;
2011: No overall out-of-pocket maximum: 0.
Plan type: Local PPO;
2010: Overall out-of-pocket maximum of greater than $6,700: 2%;
2010: Overall out-of-pocket maximum of $3,401 to $6,700: 31%;
2010: Overall out-of-pocket maximum of $3,400 or less: 56%;
2010: No overall out-of-pocket maximum: 11%;
2011: Overall out-of-pocket maximum of greater than $6,700: 0;
2011: Overall out-of-pocket maximum of $3,401 to $6,700: 50%;
2011: Overall out-of-pocket maximum of $3,400 or less: 50%;
2011: No overall out-of-pocket maximum: 0.
Plan type: Regional PPO;
2010: Overall out-of-pocket maximum of greater than $6,700: 2%;
2010: Overall out-of-pocket maximum of $3,401 to $6,700: 59%;
2010: Overall out-of-pocket maximum of $3,400 or less: 39%;
2010: No overall out-of-pocket maximum: 0;
2011: Overall out-of-pocket maximum of greater than $6,700: 0;
2011: Overall out-of-pocket maximum of $3,401 to $6,700: 70%;
2011: Overall out-of-pocket maximum of $3,400 or less: 30%;
2011: No overall out-of-pocket maximum: 0.
Plan type: PFFS;
2010: Overall out-of-pocket maximum of greater than $6,700: 1%;
2010: Overall out-of-pocket maximum of $3,401 to $6,700: 64%;
2010: Overall out-of-pocket maximum of $3,400 or less: 30%;
2010: No overall out-of-pocket maximum: 5%;
2011: Overall out-of-pocket maximum of greater than $6,700: 0;
2011: Overall out-of-pocket maximum of $3,401 to $6,700: 79%;
2011: Overall out-of-pocket maximum of $3,400 or less: 21%;
2011: No overall out-of-pocket maximum: 0.
Source: GAO analysis of 2010 and 2011 CMS plan benefit package data and
enrollment data.
Notes: Results are weighted by plan enrollment in April of each year.
The "All plans" category includes PSOs in addition to the other types
of MA plans shown above. Results are not reported separately for PSOs
because these plans constituted less than 1 percent of total enrollment
in 2010 and 2011. We excluded the following types of plans from our
analysis: employer plans, Part B-only plans, SNPs, Program of All
Inclusive Care for the Elderly plans, demonstration plans, and cost
plans. If a plan had two out-of-pocket maximums--one for in-network
services and one for combined in-and out-of-network services, then we
used the lower value for this analysis.
[End of figure]
MA Plans' Coverage of Additional Benefits Was Generally Similar in 2010
and 2011:
The percentage of MA beneficiaries in plans that offered additional
benefits was generally similar in 2010 and 2011. In both years, at
least 64 percent of beneficiaries were in plans providing benefits such
as hearing and vision. There were some changes, however, between 2010
and 2011 in the percentage of beneficiaries with certain benefits. For
example, the proportion of MA beneficiaries with vision coverage
decreased from 84 percent to 79 percent (see fig. 5). Such changes
could be due to changes in plan offerings, changes in beneficiaries'
plan selections, or some combination of the two. See appendix I for
details on changes in the proportion of MA beneficiaries who received
coverage for additional benefits by plan type.
Figure 5: MA Beneficiaries in Plans that Offered Additional Benefits,
2010 and 2011:
[Refer to PDF for image: vertical bar graph]
Type of additional benefit: Professional[A];
Percentage of beneficiaries: 2010: 100%;
Percentage of beneficiaries: 2011: 98%.
Type of additional benefit: Health and education[B];
Percentage of beneficiaries: 2010: 97%;
Percentage of beneficiaries: 2011: 98%.
Type of additional benefit: Inpatient facility[C];
Percentage of beneficiaries: 2010: 97%;
Percentage of beneficiaries: 2011: 97%.
Type of additional benefit: International outpatient emergency[D];
Percentage of beneficiaries: 2010: 96%;
Percentage of beneficiaries: 2011: 97%.
Type of additional benefit: Outpatient blood[E];
Percentage of beneficiaries: 2010: 87%;
Percentage of beneficiaries: 2011: 91%.
Type of additional benefit: Vision[F];
Percentage of beneficiaries: 2010: 84%;
Percentage of beneficiaries: 2011: 79%.
Type of additional benefit: Skilled nursing facility[G];
Percentage of beneficiaries: 2010: 72%;
Percentage of beneficiaries: 2011: 68%.
Type of additional benefit: Hearing[H];
Percentage of beneficiaries: 2010: 64%;
Percentage of beneficiaries: 2011: 64%.
Type of additional benefit: Dental[I];
Percentage of beneficiaries: 2010: 38%;
Percentage of beneficiaries: 2011: 38%.
Source: GAO analysis of 2010 and 2011 CMS plan benefit package and
enrollment data.
Notes: Results are weighted by plan enrollment in April of each year.
The "All plans" category includes PSOs in addition to the other types
of MA plans shown above. Results are not reported separately for PSOs
because these plans constituted less than 1 percent of total enrollment
in 2010 and 2011. We excluded the following types of plans from our
analysis: employer plans, Part B-only plans, SNPs, Program of All
Inclusive Care for the Elderly plans, demonstration plans, and cost
plans.
[A] Professional services benefits may include screenings and
immunizations beyond what Medicare FFS covers.
[B] Health and education benefits may include nutritional training,
smoking cessation, health club memberships, or nursing hotlines.
[C] Inpatient facility benefits may include additional days beyond what
Medicare FFS covers.
[D] International outpatient emergency benefits may include additional
services beyond what Medicare FFS covers.
[E] Outpatient blood benefits may include payment associated with pints
of blood received as an outpatient or as part of a Part B-covered
service beyond what Medicare FFS covers.
[F] Vision benefits may include coverage for routine eye exams, contact
lenses, or eyeglasses (lenses and frames).
[G] Skilled nursing facility benefits may include waiving the 3-day
inpatient hospital stay requirement in Medicare FFS.
[H] Hearing benefits may include coverage for hearing tests, hearing
aid fittings, and hearing aid evaluations.
[I] Dental benefits may include oral exams, teeth cleanings, fluoride
treatments, dental X-rays, or emergency dental services.
[End of figure]
Agency Comments:
We received written comments from HHS on a draft version of this
report. HHS did not comment directly on our results for 2010 and 2011.
However, HHS stated that MA premiums would be 4 percent lower, on
average, in 2012 compared to 2011 but that 2012 benefits would remain
consistent with those offered in 2011. HHS also stated that MA plans
projected that enrollment would be 10 percent higher in 2012 than in
2011. HHS provided technical comments, which we incorporated as
appropriate. We reprinted the letter from HHS in appendix II.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
Secretary of HHS and to interested congressional committees. In
addition, the report will be available at no charge on the GAO Web site
at [hyperlink, http://www.gao.gov]. If you or your staff have any
questions about this report, please contact me at (202) 512-7114 or
CosgroveJ@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. GAO staff who made major contributions to this report are
listed in appendix III.
Signed by:
James C. Cosgrove:
Director, Health Care:
[End of section]
Appendix I: MA Beneficiaries Receiving Coverage for Additional Benefits
by Plan Type, 2010 and 2011:
Table 1: Percent of MA Beneficiaries in Plans that Offered Additional
Benefits in 2010 and 2011, by Plan Type:
Service category: Professional[A];
All plans: 2010: 100%;
All plans: 2011: 98%;
HMO: 2010: 100%;
HMO: 2011: 98%;
Local PPO: 2010: 99%;
Local PPO: 2011: 95%;
Regional PPO: 2010: 100%;
Regional PPO: 2011: 98%;
PFFS: 2010: 100%;
PFFS: 2011: 100%.
Service category: Health and education[B];
All plans: 2010: 97%;
All plans: 2011: 98%;
HMO: 2010: 98%;
HMO: 2011: 98%;
Local PPO: 2010: 97%;
Local PPO: 2011: 96%;
Regional PPO: 2010: 95%;
Regional PPO: 2011: 97%;
PFFS: 2010: 94%;
PFFS: 2011: 99%.
Service category: Inpatient facility[C];
All plans: 2010: 97%;
All plans: 2011: 97%;
HMO: 2010: 97%;
HMO: 2011: 96%;
Local PPO: 2010: 99%;
Local PPO: 2011: 99%;
Regional PPO: 2010: 99%;
Regional PPO: 2011: 99%;
PFFS: 2010: 96%;
PFFS: 2011: 97%.
Service category: International outpatient emergency[D];
All plans: 2010: 96%;
All plans: 2011: 97%;
HMO: 2010: 97%;
HMO: 2011: 97%;
Local PPO: 2010: 93%;
Local PPO: 2011: 95%;
Regional PPO: 2010: 100%;
Regional PPO: 2011: 100%;
PFFS: 2010: 96%;
PFFS: 2011: 100%.
Service category: Outpatient blood[E];
All plans: 2010: 87%;
All plans: 2011: 91%;
HMO: 2010: 85%;
HMO: 2011: 90%;
Local PPO: 2010: 90%;
Local PPO: 2011: 94%;
Regional PPO: 2010: 100%;
Regional PPO: 2011: 98%;
PFFS: 2010: 87%;
PFFS: 2011: 92%.
Service category: Vision[F];
All plans: 2010: 84%;
All plans: 2011: 79%;
HMO: 2010: 94%;
HMO: 2011: 90%;
Local PPO: 2010: 73%;
Local PPO: 2011: 65%;
Regional PPO: 2010: 63%;
Regional PPO: 2011: 46%;
PFFS: 2010: 60%;
PFFS: 2011: 50%.
Service category: Skilled nursing facility[G];
All plans: 2010: 72%;
All plans: 2011: 68%;
HMO: 2010: 69%;
HMO: 2011: 64%;
Local PPO: 2010: 83%;
Local PPO: 2011: 80%;
Regional PPO: 2010: 68%;
Regional PPO: 2011: 65%;
PFFS: 2010: 77%;
PFFS: 2011: 76%.
Service category: Hearing[H];
All plans: 2010: 64%;
All plans: 2011: 64%;
HMO: 2010: 70%;
HMO: 2011: 72%;
Local PPO: 2010: 46%;
Local PPO: 2011: 44%;
Regional PPO: 2010: 49%;
Regional PPO: 2011: 48%;
PFFS: 2010: 58%;
PFFS: 2011: 50%.
Service category: Dental[I];
All plans: 2010: 38%;
All plans: 2011: 38%;
HMO: 2010: 37%;
HMO: 2011: 36%;
Local PPO: 2010: 55%;
Local PPO: 2011: 47%;
Regional PPO: 2010: 60%;
Regional PPO: 2011: 51%;
PFFS: 2010: 22%;
PFFS: 2011: 15%.
Service category: Number of plans;
All plans: 2010: 2,294;
All plans: 2011: 1,964;
HMO: 2010: 1,266;
HMO: 2011: 1,127;
Local PPO: 2010: 527;
Local PPO: 2011: 533;
Regional PPO: 2010: 59;
Regional PPO: 2011: 59;
PFFS: 2010: 435;
PFFS: 2011: 239.
Service category: Number of beneficiaries;
All plans: 2010: 7,903,152;
All plans: 2011: 8,364,464;
HMO: 2010: 5,137,525;
HMO: 2011: 5,629,092;
Local PPO: 2010: 988,821;
Local PPO: 2011: 1,360,888;
Regional PPO: 2010: 484,041;
Regional PPO: 2011: 762,754;
PFFS: 2010: 1,270,904;
PFFS: 2011: 581,644.
Source: GAO analysis of 2010 and 2011 CMS plan benefit package and
enrollment data.
Notes: Results are weighted by plan enrollment in April of each year.
The "All plans" category includes PSOs in addition to the other types
of MA plans shown above. Results are not reported separately for PSOs
because these plans constituted less than 1 percent of total enrollment
in 2010 and 2011. We excluded the following types of plans from our
analysis: employer plans, Part B-only plans, SNPs, Program of All
Inclusive Care for the Elderly plans, demonstration plans, and cost
plans.
[A] Professional services benefits may include screenings and
immunizations beyond what Medicare FFS covers.
[B] Health and education benefits may include nutritional training,
smoking cessation, health club memberships, or nursing hotlines.
[C] Inpatient facility benefits may include additional days beyond what
Medicare FFS covers.
[D] International outpatient emergency benefits may include additional
services beyond what Medicare FFS covers.
[E] Outpatient blood benefits may include payment associated with pints
of blood received as an outpatient or as part of a Part B covered
service beyond what Medicare FFS covers.
[F] Vision benefits may include coverage for routine eye exams, contact
lenses, or eyeglasses (lenses and frames).
[G] Skilled nursing facility benefits may include waiving the 3-day
inpatient hospital stay requirement in Medicare FFS.
[H] Hearing benefits may include coverage for hearing tests, hearing
aid fittings, and hearing aid evaluations.
[I] Dental benefits may include oral exams, teeth cleanings, fluoride
treatments, dental X-rays, or emergency dental services.
[End of table]
[End of section]
Appendix II: Comments from the Department of Health and Human Services:
Department Of Health & Human Services:
Office Of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
October 7, 2011:
James Cosgrove, Director:
HealthCare:
U.S. Government Accountability Office:
441 G Street NW:
Washington, DC 20548:
Dear Mr. Cosgrove:
Attached are comments on the U.S. Government Accountability Office's
(GAO) draft report entitled, "Medicare Advantage: Enrollment Increased
from 2010 to 2011 while Premiums Decreased and Benefit Packages Were
Stable" (GAO-12-93). The Department appreciates the opportunity to
review this report before its publication.
Sincerely,
Signed by:
Jim R. Esquea:
Assistant Secretary for Legislation:
Attachment:
General Comments Of The Department Of Health And Human Services (HHS)
On The Government Accountability Office's (GAO) Draft Report Entitled,
"Medicare Advantage: Enrollment Increased From 2010 To 2011 While
Premiums Decreased And Benefit Packages Were Stable" (GAO-12-93):
The Department recently announced that 2012 Medicare Advantage premiums
are falling and projected enrollment is rising. On average, Medicare
Advantage premiums will be 4 percent lower in 2012 than in 2011, and
plans project enrollment to increase by 10 percent. Of people with
Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage
plan, and benefits remain consistent with those offered in 2011. The
Centers for Medicare and Medicaid Services (CMS) was able to use
authority provided by the Affordable Care Act to protect beneficiaries
from significant increases in costs or cuts in benefits in 2012. In
addition, average premiums are declining for the second year in a row:
2012 premiums are projected to be 11.5 percent below 2010 premiums.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
James C. Cosgrove, (202) 512-7114 or CosgroveJ@gao.gov:
Acknowledgments:
In addition to the contact named above, Christine Brudevold, Assistant
Director; William Black; George Bogart; Elizabeth Morrison; and Kristal
Vardaman made key contributions to this report.
[End of section]
Footnotes:
[1] Medicare FFS, also known as original Medicare, includes Medicare
Parts A and B. Medicare Part A covers hospital and other inpatient
stays. Medicare Part B is optional insurance, which covers hospital
outpatient, physician, and other services and requires a monthly
premium. Medicare beneficiaries who enroll in Part B have the option of
enrolling in an MA plan--which operates under Medicare Part C--to
receive their Parts A and B benefits. In addition, all Medicare
beneficiaries may opt to receive prescription drug coverage under
Medicare Part D either through a separate Part D plan or through an MA
plan that offers prescription drug benefits.
[2] See Pub. L. No. 111-148, title III, subtitle C, 124 Stat. 119, 442
et seq. (2010) (as amended by the Health Care and Education
Reconciliation Act of 2010, Pub. L. No. 111-152, § 1102, 124 Stat.
1029, 1040 et seq.) For purposes of this report, references to PPACA
include the amendments made by the Health Care and Education
Reconciliation Act of 2010.
[3] See Congressional Budget Office, H.R. 4872, Reconciliation Act of
2010 (Final Health Care Legislation), March 20, 2010 (based on MA
provisions in a combination of prior versions of PPACA and the Health
Care and Education Reconciliation Act of 2010).
[4] The Congressional Budget Office projected that, under PPACA, about
9.1 million beneficiaries would be enrolled in MA plans in 2019--about
4.8 million fewer than it projected would enroll in the absence of
PPACA. See Congressional Budget Office, Comparison of Projected
Enrollment in Medicare Advantage Plans and Subsidies for Extra Benefits
Not Covered by Medicare Under Current Law and Under Reconciliation
Legislation Combined with H.R. 3590 as Passed by the Senate, March 19,
2010 (based on a preliminary estimate of MA provisions in a prior
version of PPACA combined with draft language for the Health Care and
Education Reconciliation Act of 2010).
[5] CMS is the agency that administers the Medicare program.
[6] We also included provider-sponsored organizations (PSO) in our
analysis.
[7] Beneficiaries in a medical savings account plan receive annual
deposits from CMS into an interest-bearing account to help them cover
their health care costs until they have reached their plan's
deductible, after which the plan is responsible for all Medicare-
covered costs.
[8] We also excluded Program of All Inclusive Care for the Elderly
plans, which provide social and medical services primarily in adult day
health centers, CMS demonstration plans, and cost plans.
[9] Thirteen of the 2,307 plans in our analysis for 2010, accounting
for about 0.2 percent of total enrollment, did not have data on out-of-
pocket maximums in the benefit package data, so we used the out-of-
pocket maximum information in the bid data. All of the 1,964 plans in
our analysis for 2011 had out-of-pocket maximum information in the
benefit package data.
[10] We excluded the 13 plans from our analysis of additional benefits
in 2010 that did not have this information in the benefit package data.
The Social Security Act uses the term supplemental benefits; throughout
this report, we use the term additional benefits to refer to
supplemental benefits. Our analysis addresses mandatory supplemental
benefits, which are benefits in addition to the Medicare FFS benefit
package that must be available to every beneficiary enrolled in the
plan. We did not analyze optional supplemental benefits, which are
available to those enrollees who elect and pay for them.
[11] Beneficiary cost sharing can be in the form of (1) a deductible--
the amount a beneficiary pays for services before the plan or Medicare
FFS begins to pay; (2) coinsurance--a percentage of the cost for a
given service that a beneficiary must pay; and (3) copayments--a
standard amount a beneficiary must pay for a service.
[12] In 2011, Medicare FFS cost-sharing requirements include a
deductible of $1,132 for inpatient care--covered under Medicare Part A-
-and a $162 deductible and 20 percent coinsurance for Part B physician
services.
[13] Under this total, CMS limits cost sharing to an amount that is
actuarially equivalent to the Medicare FFS amount for certain services,
such as inpatient facility and skilled nursing facility.
[14] MA plans offering Part D prescription drug coverage undergo a
separate process to determine monthly Medicare payments for Part D
benefits, including enrollee premiums. This process involves comparing
a plan's bid for providing Part D benefits to the average bid among
plans nationally.
[15] The remaining 25 percent of the difference between an MA plan's
bid and the benchmark is retained by the government.
[16] Pub. L. No. 111-148, § 3201, 124 Stat. 119, 442 (as amended by
Pub. L. No. 111-152, § 1102, 124 Stat. 1029, 1040). The benchmark for
an MA plan is calculated based on the county-level benchmarks in the
plan's service area. From 2007 through 2010, CMS generally updated
county benchmarks annually for local MA plans by the growth of Medicare
expenditures. Benchmarks for regional MA plans are updated by combining
the county benchmarks in each region with a weighted average of
regional plan bids.
[17] Under the revised methodology, county benchmarks will range from
95 percent of Medicare FFS spending per beneficiary for MA plans in
areas with the highest FFS spending levels to 115 percent of FFS
spending per beneficiary for plans in areas with the lowest FFS
spending levels. The Medicare Payment Advisory Commission (MedPAC)
estimated that the revised methodology would reduce the average
benchmark from an average of 113 percent of Medicare FFS spending per
beneficiary in 2011 to 101 percent in 2017. MedPAC, Report to the
Congress: Medicare Payment Policy (March 2011).
[18] CMS assesses plan quality using a five-star rating scale based on
measures of clinical quality, patients' reported care experience, and
contract performance. Once fully phased in, the revised rebates will
range from 50 percent of the difference between a plan's bid and
benchmark for plans with the lowest quality ratings to 70 percent of
the difference for plans with the highest quality ratings.
[19] On November 10, 2010, CMS announced that it would provide bonus
payments to MA plans beginning in 2012 through a new demonstration
project called the Quality Bonus Payment Demonstration.
[20] The Medicare Improvements for Patients and Providers Act of 2008
required PFFS plans to establish provider networks beginning in 2011 if
these plans were in areas with at least two available network-based
plans (such as HMOs or PPOs). In areas with fewer than two network-
based plans, most PFFS plans will continue to have the option of
operating without networks if they pay providers at Medicare FFS rates
or higher. Pub. L. No. 110-275, §162, 122 Stat. 2494, 2569.
[21] CMS identified potentially duplicative plans by determining if
plans of similar plan types offered by a given MA organization had
meaningful differences in the projected level of beneficiaries' out-of-
pocket costs. CMS considered two plans of the same sponsor and plan
type as potentially duplicative if the difference in beneficiaries'
projected out-of-pocket costs was less than $20.
[22] CMS officials said that most of these plans, which include SNPs
and in total accounted for about 16,000 MA beneficiaries, were
consolidated rather than eliminated. CMS considered plans to have low
enrollment if they had fewer than 500 beneficiaries for non-SNP plans
and fewer than 100 for SNPs. According to CMS, the agency maintains a
flexible approach in enforcing these thresholds to ensure that
geographic areas have a suitable number of plan options. CMS noted that
it also considers the specific populations served by the plan and
locality needs, among other factors that may cause the plan to have low
enrollment.
[23] Beneficiaries in MA plans also continue to pay the Part B premium;
however, MA plans may use their rebates to reduce beneficiaries' Part B
premiums. In 2011, for most Medicare beneficiaries, the Medicare Part B
monthly premium was between $96.40 and $115.40.
[24] The total MA plan premium--including the premium for Part D
prescription drug coverage--for the over 90 percent of beneficiaries in
our analysis who were in MA plans with Part D coverage, decreased from
$41 in 2010 to $36 in 2011.
[25] Medicare FFS cost sharing takes different forms. In 2011, Medicare
FFS required a deductible payment of $1,132 before it began paying for
an inpatient stay, and $162 before it began paying for any Part B
services. For certain benefits Medicare FFS requires coinsurance, such
as 20 percent of the total payment for physician visits, while for
other benefits Medicare FFS requires copayments, such as $283 per day
for days 61 through 90 of an inpatient stay in 2011.
[26] Based on MA plans' projections, we estimated that about 69 percent
of the funding MA plans used to reduce cost sharing or provide
additional benefits in 2010 was from their rebates, and in 2011 it was
about 73 percent.
[27] In 2011, HMOs and PFFS plans were required to establish mandatory
out-of-pocket maximums of no more than $6,700. Local PPOs were required
to establish in-network out-of-pocket maximums of no more than $6,700
and catastrophic out-of-pocket maximums of no more than $10,000.
Regional PPOs could determine their own in-network and catastrophic
limits. Beginning in 2012, regional PPOs will have the same out-of-
pocket maximum requirement as local PPOs.
[28] In 2010 and 2011, CMS gave plans with out-of-pocket maximums of
$3,400 or below greater flexibility in the design of their cost-sharing
requirements than plans with higher out-of-pocket maximums. For
example, in 2011, plans with out-of-pocket maximums higher than $3,400
could not charge beneficiaries more than $1,613 for a 6-day inpatient
facility stay, while plans with out-of-pocket maximums at or below
$3,400 could charge beneficiaries up to $2,016 for a 6-day inpatient
facility stay.
[End of section]
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