Insurers Drop Out of Medicare Advantage, Citing New U.S. Rules
New federal regulations scheduled to take effect in 2011 have encouraged many insurers to discontinue their private fee-for-service Medicare Advantage plans, the Wall Street Journal reports. Â On Thursday, CMS officials said the move could affect about 667,000 beneficiaries.
PFFS plans allow beneficiaries to see any physician they want as long as the physician accepts payments through their plans, while MA plans typically have networks of providers. About 2.44 million Medicare beneficiaries are enrolled in PFFS plans.
Last year, Congress voted to require PFFS plans to establish networks of providers by 2011, and while many insurance companies -- such as Humana -- are doing just that others are not.
For example, WellCare Health Plans spokesperson Amy Knapp said the company believes that expanding networks to meet the new regulations is unwise and is canceling its PFFS plans, which cover about 110,000 beneficiaries.
In addition, UnitedHealth Group will discontinue its PFFS plans for about 2% of beneficiaries in areas where no other UnitedHealth Medicare Advantage plan is available.
CMS said beneficiaries affected by the changes can either choose other private plans or go back to traditional Medicare (Zhang/Johnson, Wall Street Journal, 10/1).
According to CMS, despite the changes, there still will be a "robust" number of MA plans available and "the same percentage of Medicare beneficiaries who have access to a Medicare Advantage plan today (99.9%) will have access to a Medicare Advantage plan in 2010" (Reichard, CQ HealthBeat, 10/1).
On Thursday, Karen Ignagni, president and CEO of America's Health Insurance Plans, said, "Today's announcement demonstrates the real impact that policy changes can have on the health security of seniors in Medicare Advantage," adding that proposed cuts under consideration in health care overhaul legislation "will put the entire program at risk and cause seniors to face even higher premiums, further reductions in benefits and fewer health care choices."
Premium IncreasesOn Thursday, CMS also announced that premiums for Medicare Advantage plans in 2010 will increase to $39 a month, up from $32 a month this year and that premiums for Medicare prescription drug plans will increase by an average of $2 to $30 a month (Wall Street Journal, 10/1). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.