Medicare Advantage gains popularity with seniors

Medicare Advantage enrollment projected to grow 11 percent

Enrollment in Medicare Advantage, the private insurance segment of the popular U.S. healthcare program for the elderly, is expected to grow 11 percent next year while premiums remain steady, government health officials said on Wednesday.
The U.S. Centers for Medicare and Medicaid Services estimated that 14.5 million people will enroll in Medicare Advantage plans in 2013, based on insurance industry expectations. That is up from 13.1 million people this year.


The average monthly Medicare Advantage premium is projected to rise just $1.47 to $32.59, and officials said the basic premium for Medicare's Part D prescription drug plan would hold steady at around $30 a month.

The data, released as Medicare enters its annual enrollment period, comes as President Barack Obama faces Republican campaign accusations that his healthcare reform law will weaken Medicare and raise coverage costs for seniors.

If the projected rise in Medicare Advantage enrollment does occur next year, the percentage of Medicare beneficiaries receiving main benefits through private plans would rise to nearly 28 percent from about 25 percent today.

Health and Human Services Secretary Kathleen Sebelius said the latest data shows that the reform law's curbs on premium rate increases and other regulations on private insurers has made Medicare Advantage more accessible to the nearly 50 million senior citizens and disabled Americans who are Medicare beneficiaries.

"Since the law was enacted in 2010, average premiums have gone down, enrollment has gone up, and new benefits and lower drug costs continue to help millions of seniors and people with disabilities," Sebelius said in a statement.

But the health insurance industry warned that Medicare Advantage benefits could be at risk from the reform law, which will tax insurers and reduce the level of government payments that private plans receive.

"Given the size and scope of these cuts, Medicare beneficiaries are likely to face higher costs and coverage disruptions in the coming years," the industry group, America's Health Insurance Plans, said in a statement.

Critics say government payments to Medicare Advantage plans allow insurers to attract beneficiaries with taxpayer-subsidized rates and benefits that could not be replicated in the private market and cost far more than traditional Medicare.

Obama's Patient Protection and Affordable Care Act would reduce the rate of payments from as high as 200 percent of traditional Medicare to a range of 95 percent to 115 percent.