Medicare Advantage: Planning for 2012by Denise Early on Feb. 23, 2011, under Health
The Centers for Medicare & Medicaid Services (CMS) has put out a 153-page letter that provides instructions and information for insurance companies as they design their Medicare Advantage plans for 2012. Details and costs for 2012 Medicare Advantage plans must be submitted to CMS by June 6, 2011.
CMS is cutting payments to Advantage plans, but will also give the plans more money if they receive from 3 to 5 stars. The five-star rating system measures plans’ performance on a range of areas from customer satisfaction to keeping members healthy.
Because of this give and take (or take and give) CMS says actual Medicare Advantage per-capita payment will go up 1.6%. With all the talk of CMS slashing payments to Medicare Advantage plans this is good news for the insurance companies and people enrolled in Advantage plans. And it may mean the Medicare Advantage market won’t be faced with large shocks in the form of higher premiums or plan cancellations for 2012.
In Arizona, Medicare advantage enrollment is very high among Medicare beneficiaries, particularly in Mariopa county (44%), Pinal (49%), and Pima county (45%).
In 2012, plans that have 4-star or 5-star quality ratings will get higher payments than other plans. CMS has also decided to give 3-star rated plans a bonus -though smaller than 4 and 5 star plans will receive. Expanding bonus payments to 3 star plans is good for Arizona because most of our plans get 3 stars. Only Cigna in Maricopa county gets 4 stars.
In 2012, Medicare will allow people to drop a lower-rated plan to enroll in a 5-star Advantage plan at any time during the year. This does not affect people in Arizona, as we have no 5 star-rated plans.
Advantage plans that propose to increase premiums or co-pays by 10% or more will get special attention from CMS.