Health, drug plan star ratings improve for 2018

CMS issued its star ratings for Medicare health and drug plans for 2018, which according to the agency will assist consumers with information on high-quality health choices for coverage. According to CMS, most areas across the country have Medicare Advantage and Part D plans with four or more stars. In 2018, approximately 73 percent of Medicare Advantage enrollees with prescription drug coverage will be in plans with four and five stars. This rose from the approximately 69 percent of enrollees in four and five star plans in 2017. Approximately 44 percent of Medicare Advantage plans that offer prescription drug coverage will have an overall rating of four stars or higher in 2018.

Medicare Part D prescription drug plan enrollees are also benefiting from improved access to high-quality plans. In 2018, approximately 47 percent of enrollees in stand-alone prescription drug plans will be in plans with four and five stars. This is an increase from the approximately 41 percent of enrollees in four or five star plans in 2017. Approximately 52 percent of stand-alone prescription drug plans will have a rating of four stars or higher in 2018.

The number of Medicare Advantage plans available to individuals to choose from is increasing from about 2,700 to more than 3,100 nationwide. More than 85 percent of people with Medicare will have access to 10 or more Medicare Advantage plans.

Premiums

CMS also estimated that the Medicare Advantage average monthly premium will decrease by 6 percent to $30 in 2018 from an average of $31.91 in 2017. About 77 percent of Medicare Advantage enrollees remaining in their current plan will have the same or lower premium for 2018. CMS noted that the average basic premium for a Medicare prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month.

Narrow MA networks reduce cost at what price?

More than one-third (35 percent) of Medicare Advantage enrollees were in “narrow” network plans, which insurers create to greater control the costs and quality of care provided to enrollees in the plan. According to a Kaiser Family Foundation (KFF) report, the size and composition of Medicare Advantage provider networks is particularly important to enrollees when they have an unforeseen medical event or serious illness. As of 2017, 19 million of the 58 million people on Medicare are enrolled in a Medicare Advantage plan, yet KFF noted that little is known about their provider networks.

Accessing this information may not be easy for enrollees and comparing networks could be especially challenging. The report noted that beneficiaries could face significant costs if they unknowingly went out-of-network. In addition to the differences across plans, the report discussed questions for policymakers about the potential for wide variations in the healthcare experience of Medicare Advantage enrollees across the country.

Findings

KFF examined data from 391 plans, offered by 55 insurers in 20 counties, which accounted for 14 percent of all Medicare Advantage enrollees nationwide in 2015. In addition to the narrow network plans, Medicare Advantage networks included less than half (46 percent) of all physicians in a county, on average. The network size also varied greatly among Medicare Advantage plans offered in a given county.

For example, while enrollees in Erie County, NY had access to 60 percent of physicians in their county, on average, 16 percent of the plans in Erie had less than 10 percent of the physicians in the county while 36 percent of the plans had more than 80 percent of the physicians in the county. Access to psychiatrists was more restricted than for any other specialty. Medicare Advantage plans had 23 percent of the psychiatrists in a county, on average; 36 percent of plans included less than 10 of psychiatrists in the county. Some plans provided relatively little choice for other specialties as well—20 percent of plans included less than 5 cardiothoracic surgeons, 18 percent of plans included less than 5 neurosurgeons, 16 percent of plans included less than 5 plastic surgeons, and 16 percent of plans included less than 5 radiation oncologists.

Conversely, broad network plans tended to have higher average premiums than narrow network plans, and this was true for both HMOs ($54 versus $4 per month) and PPOs ($100 versus $28 per month).

KFF noted that CMS should consider strategies to improve the quality of information available to current and prospective Medicare Advantage enrollees. For instance, accurate, up-to-date provider directories to inform beneficiaries as they choose plans, along with the agency’s proposal to review all Medicare Advantage networks at least every three years.

More choices and lower premiums available for MA and PDPs in CY 2018

As calendar year (CY) 2018 approaches, CMS reports that both the Medicare Advantage (MA) and the Part D prescription drug plan (PDP) programs continue to grow, currently providing care and services to more than one-third of Medicare beneficiaries. CMS also reports that the average monthly premium for an MA plan will decrease, enrollment in MA is projected to reach an all-time high, and premiums for a basic PDP will fall for the first time since 2012.

Earlier this year, CMS announced new policies in the 2018 Rate Announcement and Final Call Letter that support flexibility, efficiency, and innovative approaches that are designed to improve quality accessibility and affordability in MA and PDP programs.

MA program data

CMS data provides the following information regarding the MA program for CY 2018:

  • MA enrollment is projected to be an all-time high of 20.4 million beneficiaries, representing a 9-percent (1.7 million) increase from 18.7 million in CY 2017.
  • MA average monthly premiums will decrease by $1.91 to $30.
  • 99 percent of Medicare beneficiaries will have access to at least one MA health plan in their area.
  • More than 85 percent of Medicare beneficiaries will have access to 10 or more MA plans.
  • The average number of MA plan choices per county will increase by two plans—up to approximately 29 plan choices per county.
  • Access to popular supplemental benefits, such as dental, vision, and hearing, continues to grow in MA plans.
  • Approximately 77 percent of MA enrollees in 2017 will have the same or lower premium in 2018 if they continue in the same plan.

PDP program data

CMS projects that the average monthly premium for a basic Medicare PDP in CY 2018 will decrease by $1.20 to an estimated $33.50 per month. CMS also reports that all Medicare beneficiaries will have access to at least one stand-alone Medicare PDP.

Medicare Open Enrollment improvements

CMS is announcing several consumer-friendly improvements so that people with Medicare can make an informed choice between original fee-for-service Medicare and MA plans during open enrollment. These improvements include: (1) updating the “Medicare & You” handbook to better explain coverage options; (2) establishing a help wizard on Medicare.gov that will point to resources to help make informed health care decisions; and (3) establishing a new email communication opportunity to improve the customer service experience through important messages and reminders.

Medicare Advantage looks forward to a stable new year

The Medicare Advantage (MA) market appears that it will remain relatively stable in 2017, undergoing limited changes in average premiums, plan offerings, and insurer participation, according to a Kaiser Family Foundation (KFF) Issue Brief. While KFF determined that factors like plan availability, premiums, out-of-pocket limits, and other plan features, suggest a stable market, the Issue Brief warns that lawmakers’ plans proposing to transform Medicare into a “premium support system” could have uncertain consequences for both plans and beneficiaries.

Plans

The Issue Brief points to the following highlights for MA plans in 2017:

  • with a total of 2,034 MA plans offered in 2017, the average MA beneficiary will be able to choose between 19 plans (a number which has remained stable since 2012);
  • the average MA beneficiary will have a choice of plans offered by six firms;
  • enrollees in MA prescription drug plans (MA-PDs) who stay in the same plan between 2016 and 2017, will experience, on average, a premiums increase of 4 percent;
  • premiums remain relatively flat while out-of-pocket costs for Part A and B benefits have increased by 25 percent, since 2011, to $5,332 in 2017; and
  • about 41 percent of MA plans are rated as 4 stars or higher in 2017.

Shortcomings

The Issue Brief notes that it remains difficult for consumers and researchers to obtain the information necessary to allow plan comparisons. Specifically, it is difficult to find data to compare plan networks, cost sharing, extra benefits, or the performance of individual plans on quality and efficiency metrics. Access to such material could be helpful in strengthening program oversight and assisting consumers with making appropriate plan choices.

Medicare Transformation

KFF acknowledges that some lawmakers are planning to build off of the MA model to transform Medicare into a “premium support system.” The Issue Brief warns that such a transformation would constitute a significant departure from the status quo, in terms of altering federal payments to plans and plans’ financial incentives—changes with unknown impact for Medicare and its beneficiaries.