CMS News
| For Immediate Release: | Contact: |
| Friday, February 27, 2004 | CMS Office of Public Affairs 202-690-6145 |
For questions about Medicare please call 1-800-MEDICARE or visit www.medicare.gov. |
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REVIEW SHOWS BENEFICIARIES IN MEDICARE ADVANTAGE PLANS WILL SEE BETTER BENEFITS, LOWER COSTS
About 3.7 million enrollees in Medicare Advantage plans will see improved benefits offered by their health plan because of significant increases in federal payment rates, according to a review by the Centers for Medicare & Medicaid Services (CMS). Premiums will decrease for 1.9 million enrollees and 2 million enrollees will have a decline in cost sharing. Some enrollees will benefit from more than one of these changes in their health plan.
"Our mission has been to provide more choices and better benefits to America's seniors, and this shows that our reforms are delivering," Health and Human Services Secretary Tommy G. Thompson said. "The new Medicare law is already benefiting millions of seniors by cutting their out-of-pocket expenses and improving their overall care."
The new benefits and premium reductions are included in the amended adjusted community rate proposals submitted by 146 Medicare Advantage plans for the 4.6 million beneficiaries that have chosen to enroll in those plans. Increased payments to Medicare Advantage, formerly known as Medicare+Choice, will take effect March 1 and were included in the bipartisan Medicare Prescription Drug, Improvement and Modernization Act of 2003.
The Medicare beneficiaries who currently are enrolled in private health plans are benefiting in many ways: For example, a plan in New York lowered its monthly premium to $22 - down from $140. A plan in Arizona reduced its beneficiary co-payments for certain services, including primary care physician visits, which dropped to $5 from $15. Many enrollees will see increases in preventative services. Plans in California and Florida, for example, have added either, or both, dental, and vision benefits.
"Today's news is very encouraging. Many beneficiaries prefer Medicare Advantage health plans because they offer benefits that are not available in fee-for-service Medicare. Our efforts are helping to make these programs more affordable, while encouraging stabilization and expansion," said Dennis Smith, Acting CMS Administrator.
According to the plans' amended proposals, about 95 percent of the increased federal payments are being used to help beneficiaries:
- 42 percent of the additional funds are being used to strengthen provider networks and ensuring that beneficiaries continue to have more choices of physicians, specialists and other health care providers;
- 31 percent is being used to reduce enrollee premiums;
- 17 percent is being used to enhance existing benefits, including additional support for the availability of the Medicare-endorsed prescription drug discount card; and
- 5 percent is being used to reduce the amount enrollees pay for cost sharing and co-payments.
The 5 percent of funds remaining are being used by health plans to support stabilization funds that have to be used by the end of 2005 to help beneficiaries.
The average premium paid by enrollees across all plans will go down about $11 (from $42.40 to $31.44). Also, the amended proposals show that enrollees in many health plans will see an increase in drug coverage. The percentage of enrollees that now have any type of drug coverage is up from 78 percent to 80 percent.
Medicare Advantage plans submitted amended adjusted community rate proposals on January 30 to CMS for the premiums and benefits that they are offering to their enrollees. The increased payments were included in the bipartisan Medicare Prescription Drug, Improvement and Modernization Act (MMA). The provision required managed care organizations to use the funds to reduce beneficiary premium or co-pays; enhance benefits; stabilize or expand the network of doctors and other health care providers available; or reserve funds to offset either premium increases or reduced benefits in the future.
The new rate is one of many steps being taken in response to the Medicare Improvement Act. In recent weeks, CMS has also launched its plans to make a drug discount card available to Medicare beneficiaries this spring, and published updated payment rates for physicians and outpatient hospitals.
