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 Medicare Advantage Premiums to Drop 4 Percent

​Health and Human Services Secretary Kathleen Sebelius on Thursday said health insurance plan premiums for the Medicare Advantage (MA) program will decline an average of 4 percent for 2012, and Part D prescription drug premiums will be steady.

Sebelius and Jonathan Blum, deputy administrator and director of Medicare at the Centers for Medicare & Medicaid Services (CMS), told a conference call that the MA and Part D programs are strong despite concerns for their future.

“There is good news about Medicare Advantage,” Sebelius said, noting the lower premiums, strong interest from plans, access for beneficiaries, and projections from CMS that enrollment in 2012 will grow by 10 percent from 2011.

She noted that open enrollment will start earlier and end later than ever before, starting on Oct. 15 and ending Dec. 7, giving Medicare beneficiaries time to make decisions before the Jan. 1, 2012, start to the plan year. As a result, however, beneficiaries will need to make their elections by Dec. 7 rather than the usual Dec. 31. 

She noted that changes made to MA under the Affordable Care Act have proven doubters wrong. “They said we would see Medicare Advantage options shrink and premiums rise, but we are seeing just the opposite,” Sebelius said.

Blum said CMS now has more tools to help Medicare beneficiaries seeking MA options.

“Clearly the congressional signal reinforced by CMS that plans have an opportunity to earn bonus payments has created a very strong signal from Congress and CMS that we have a commitment to quality and want to create strong incentives for plans to improve,” Blum said.

For the first time, in 2012 CMS will provide financial rewards to those MA plans with high-quality scores under its five-star rating methodology.  CMS is also allowing Five-Star MA and Part D plans to continuously market and enroll beneficiaries throughout the year, as an extra incentive for high-quality performance.   
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