The 2018 “landscape files” for Medicare Advantage (MA) and Medicare Part D from The Centers for Medicare & Medicaid Services (CMS) are out, and they show the two programs as stronger than ever, and providing great value to beneficiaries. A closer look at the numbers also reveals the strategies of market leaders to get in front of two seismic events in government health programs.
Health plans continue to depend on MA as the leading source of revenues and earnings. It’s reflected in participation, a 12% increase in the total number of MA plans being offered in 2018: 2,620 plan benefit packages (PBPs) will be in the market, two-thirds from Health Maintenance Organization (HMOs).
Participation revealed the plans of market leaders to prepare for two events:
- States’ rush into managed long-term care and capitation of dual eligibles. Long-term care is the #1 or #2 item in every state budget and is crowding out funds for education, roads, and bridges. Dozens of states are capitating long-term care and benefits for duals through Special Needs Plans (SNPs). Health plans will offer 13% more SNPs for duals, 20% more SNPs for institutionalized beneficiaries, and 11% more SNPs for those with chronic health conditions.
- The Medicare Access and CHIP Reauthorization Act (MACRA) ban on Medigap insurers from selling first-dollar coverage policies in 2020. This change will impact the Plans C and F in particular, which are the most popular and comprise 65% of Medigap enrollment. The most potent competing product to these supplements is the Local Preferred Provider Organization (PPO) plan in MA, offered with the drug benefit included, and there will be a whopping 24.3% more available in 2018 as MA leaders get positioned.
Even with MA benchmarks now at parity with fee-for-service Medicare, MA plans will cost on average 2% less in 2018, and 39% of plans will have a $0 premium. HMOs continue to offer the cheapest coverage at an average of $39 per month, with ranges from $17 (FL) to $116 (ND). And value is increasing, with a 2% increase in the national average Maximum Out-of-Pocket (MOOP) cost limits to $5,420, with HMOs leading the way.
A similar dynamic is occurring among standalone Prescription Drug Plans (PDPs): a 2% average decline in premiums, to a national average of $52.23.
All in all, the landscape files show exceptionally robust and healthy MA and Part D, and remain the only safe games in all of health insurance, with a black cloud over Medicaid and the ObamaCare exchanges.
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