Tuesday, February 19, 2013

Rate Increases to Medicare Advantage in 2014

New rates proposed by the Centers for Medicare and Medicaid Services, a.k.a. CMS, will be “enormously disruptive” according to Forbes Magazine.

According to Forbes and Citibank managed care analyst Carl McDonald the proposed changes to MA reimbursement will “have the net effect of reducing payments to Medicare Advantage plans by 7 to 8 percent in 2014”. “This includes the 2.3% reduction in per capita growth rate announced by CMS on Friday, and estimated 2-3% drop as rates move to parity with fee for service…a 1.5% reduction associated with the change in coding intensity adjustment” and the 2% health insurance premium tax. “These negatives are partially offset by an estimated 1% benefit from improved Star quality ratings, re-basing, better risk scores, and fee for service normalization, resulting in an overall decline of 7-8%,” wrote McDonald yesterday in a note to clients.

We’ve been recommending for several years now (to those who can afford the additional cost) is a traditional Medicare Supplemental Insurance plan a.k.a. “Medigap”. For those where cost is a significant factor in their choice consider Medicare Supplement Plan N vs Medicare Supplement plan F or G  All of these will provide more flexibility in the doctors you can see and lower out of pocket cost if/when you get sick and need it most. For assistance making your choice whether it’s Medicare Advantage or Medicare Supplemental insurance you can get advice from the Senior Advisors Group.

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