Medicare Private Plan Market Remains Strong

The 2012 market for Medicare private plans, which include Medicare Advantage (MA) plans and prescription drug plans (PDPs), remains stable compared to past years, according to the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS).

For the 2012 plan year, premiums for Medicare Advantage plans have dropped by 4 percent on average, while prescription drug plan premiums remain mostly unchanged. In addition, most people with Medicare who choose to enroll in plans will continue to have a choice of multiple MA plans and PDPs in their area, though the number of plans available varies from county to county. Also, compared to 2011 there are fewer plan terminations—only 1 percent of Medicare beneficiaries are in plans that will not renew their contracts in 2012—and fewer automatic reassignments of individuals who have the Medicare prescription drug Low-Income Subsidy (LIS), a program that helps people with low incomes pay for drug coverage and prescriptions.

Also new this year is a requirement that MA plans cover certain preventive services at zero cost-sharing, as is the case in Original Medicare. In addition, as a result of the Affordable Care Act (ACA), beneficiaries will continue to receive discounts on drugs when they reach the Medicare prescription drug coverage gap. Finally, this year CMS will reward plans that receive five-star ratings with bonus payments, and will allow them to market and enroll individuals year-round.

Fall Open Enrollment begins earlier this year; it will run from October 15 to December 7.