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The Reports of Medicare Advantage’s death has been greatly exaggerated

21 March 2013
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Categories: Medicare Articles

The Reports of Medicare Advantage’s death has been greatly exaggerated

03/21/2012 Every year, some healthcare “experts” predict the demise of Medicare Advantage plans. They shout that reimbursement cuts would drive most of these plans out of business. Time for reality to sink in.  Just the opposite is happening. Membership in Medicare Advantage continues to grow. Enrollment in these plans grew by 7 percent from 2010 to 2011; the Centers for Medicare & Medicaid Services estimates at least 10 percent growth for 2011 to 2012.   Further evidence: In late 2011, Cigna just purchased Bravo Health, a dominant Medicare Advantage player, for $3.8 Billion. What’s the reason for continued popularity of Medicare Advantage plans? Perhaps the main reason may be that baby boomers, who are beginning to age into the Medicare program, are already accustomed to managed care plans like HMO’s and PPOs, which they likely had through employer group coverage. According to Gorman Health Group, 41 percent of Medicare age-ins choose to enroll into Medicare Advantage plans. Older seniors are more likely to prefer plain old fee-for-service Original Medicare.  A second reason for the growth of Medicare Advantage plans: often times the premium is substantially lower than a Medicare Supplement Plan. So Medicare Advantage plans, contrary to some pundits, are alive and well.  How will healthcare reform and Congrees affect these plans in the future? Stay tuned. But for now, it should remain a viable option.

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