The total number of Medicare Advantage plans available to beneficiaries will decrease 5.3 percent from 2,664 in 2013 to 2,522 in 2014, the first drop in the private Medicare plan offerings since 2011, according to an analysis conducted by healthcare business advisory company Avalere Health.
Reforms enacted under the Patient Protection and Affordable Care Act such payment cuts, changes to the CMS risk adjustment model, new medical loss ratio requirements and a new fee for health insurers caused the decline in plan offerings, according to Avalere.
As the healthcare reform law continues to take effect, the analysis found health insurers offering Medicare Advantage plans are reducing their footprint in rural markets and relying more heavily on HMOs. HMOs will go up by 2.6 percent from 2013 to 2014, while local and regional preferred provider organizations will decline by 16.6 percent.
Last week, HHS announced the projected average Medicare Advantage monthly premium in 2014 will be $32.60, an increase of $1.64 compared with the average 2013 premium. A news release from HHS stated the average number of plan choices will remain "about the same" next year, and access will remain strong, with 99.1 percent of Medicare beneficiaries having access to a plan.
Avalere's analysis also found Medicare Part D standalone prescription drug plan monthly premiums will increase by 5.1 percent overall, although premium changes among the top 10 plans vary significantly. For instance, AARP MedicareRx Saver Plus — sponsored by UnitedHealth Group — will raise its premiums 55 percent, from $15.00 to $23.22. Meanwhile, premiums for WellCare Classic will drop by 38 percent, from $33.54 to $20.72.
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