Medicare Advantage enrollment rises 10 percent

posted at 3:05 pm on February 1, 2012 by Tina Korbe

From this time last year, enrollment in Medicare Advantage rose 10 percent and premiums have fallen 7 percent, the Department of Health and Human Services announced today:

Enrollment has risen to 12.8 million in 2012, while average premiums have fallen 7.2% to $31.54, confirming loose projections from September that enrollment in Medicare Advantage plans would continue to rise and average premiums would keep falling.

Medicare beneficiaries are given the option to receive their Medicare benefits through private health insurance plans. Insurers have been focused on increasing their businesses for Medicare-based plans to tap the aging pool of baby boomers, and as high unemployment levels make expanding the mature market for employer-based insurance a tougher prospect.

In general, the Medicare Advantage program, which allows seniors to choose coverage from among private health care plans, proves that private insurance providers are able to do what the government is not — maintain patient satisfaction, lower costs and improve quality of care. According to recent research, Medicare Advantage Health Maintenance Organization plans vastly outperform traditional Medicare fee-for-service plans. Compared with traditional Medicare FFS, MA HMOs show a 20 percent reduction in hospital days, an 11 percent reduction in admissions, a 24 percent reduction in emergency room visits, a 39 percent reduction in readmissions and a 10 percent decrease in potentially avoidable admissions. Heritage Foundation health policy analyst Kate Nix summarizes:

  • MA also performed better than FFS when assessed using discharge data on hospital utilization.
  • MA plans may be doing a better job of preventing unnecessary inpatient care by increasing use of outpatient services and office visits.
  • MA plans may be avoiding unnecessary readmissions through superior discharge planning and coordination of care following an inpatient episode of care.

The moral of the story? No wonder enrollment in Medicare Advantage continues to go up. Unfortunately, Obamacare makes deep cuts to Medicare Advantage — and, thanks to those cuts, Medicare’s Chief Actuary estimates that MA enrollment will be at just 7.4 million in 2017 — whereas enrollment would have reached 14.8 million under prior law. In other words, PPACA’s MA cuts will cause a reduction of 50 percent in MA enrollment. The cuts to MA are just one more piece of evidence in the case against Obamacare.

Plus, let’s not forget that Medicare is the most costly and least efficient federal entitlement program and vastly in need of reform. In my ideal world, such a federal program wouldn’t exist at all, but, as it does and as it’s highly unlikely to be abolished, we need to at least look at our reform options. Rep. Paul Ryan has a plan on the table and other politicians and organizations have proposed solutions, too. Entitlement reform needs to be treated as an immediate and urgent priority — as, indeed, entitlements are the main driver of our national debt and the root of an important political problem, too. As lawmakers take up the topic of how best to reform Medicare, they’d do well to remember the lesson Medicare Advantage has to teach: Private competition drives down costs.

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“We’re from the government, and we’re here to help”

NapaConservative on February 1, 2012 at 3:08 PM

One of the two political parties covered all of these issues ad nausem 18 mos ago…cant seem to recall which one though /

hillsoftx on February 1, 2012 at 3:11 PM

The main reason the Medicare Advantage plans were included in the Obamacare legislation is due in no small part to the actions of AARP. Yes that senior citizen liberal lobbying group stuck it to them once again. Basically here is what happened. AARP has a Medicare Advantage plan underwritten by United Healthcare. AARP came out in support of Obamacare. United Healthcare was granted an exemption, funny how that happened. All those insurance companies who contested the findings from the CBO and the Pelosi led congress, well, sucks to be them.

Just A Grunt on February 1, 2012 at 3:13 PM

So, isn’t Medicare Advantage kind of like Paul Ryan’s plan? Private insurers competing for Medicare Insurance premiums?
Looks like a winner to me.

talkingpoints on February 1, 2012 at 3:21 PM

Medicare/Medicaid will soon be Cuban style, where yeah you’re covered, but you won’t be able to find any decent provider who is going to take your peanut coverage.

Bribes and huge copays coming soon. Thanks to the absolutely worthless, corrupt and incompetent Democrat Party.

NoDonkey on February 1, 2012 at 3:21 PM

How much of the increase is due to the ‘newly’ aging Babyboomers? What are the stats or the breakdown? Taking out the newly aged is there an increase in MA? Is it due solely to the newly aging BabyBoomers or is existing aged being added to the roles?

Do we have that break down? And, since a lot of BabyBoomers lost their 401K or retirement savings in the crash, how many are being forced into this versus those that would have opted out if could?

I guess I don’t trust any numbers related to the government or AARP.

uhangtight on February 1, 2012 at 3:26 PM

You will not find the fraud in the Medicare Advantage plans like in the traditional medicare. The insurance companies keep better track of the services, drugs and equipment being ordered.

AARP is a big racket, but there are other companies that offer
excellent plans at no or little additional cost.

Barred on February 1, 2012 at 3:26 PM

I Obamacare didn’t kill medicare after all. Don’t jump on me cons, Medicare shouldn’t be in the first place! We were find without it. on February 1, 2012 at 3:38 PM

I send AARP’s soliciting envelopes back to them empty, so they have to pay postage. Sometimes I send a little note…it’s just a little drawing I do of a hand, with a middle finger standing up for them.
Once, when they had sent 3 pieces of mail in one week…I sat on the xerox at work, (missing a couple of garments)…and sent them a copy…writing them, if they kept wasteing paper…I would send them a frontal copy, the next time. Where I used to get mail monthly-I get it every six months now. They have money to burn it seems. I’m glad they watch out for old folks!

KOOLAID2 on February 1, 2012 at 3:40 PM

Bribes and huge copays coming soon. Thanks to the absolutely worthless, corrupt and incompetent Democrat Party

AND Mitt Romney. the architech and double down defender of Obamacare.

NoDonkey on February 1, 2012 at 3:21 PM


they lie on February 1, 2012 at 3:41 PM

KOOLAID2 on February 1, 2012 at 3:40 PM

You also need to moon the RNC when they send their junk mail surveys and solicitaions for RINOS.

they lie on February 1, 2012 at 3:43 PM

MA is a load of bullcrap. Sadly, it was a Republican invention intended to increase competition, but it never accomplished that goal.

The government pays a PREMIUM (read: more money) to the MA plans to care for Medicare patients (this was supposedly TEMPORARY, but it has never gone away), who in turn use it to subsidize such goodies as gym memberships to get people to sign up.

They then ration care and penalize providers who provide more than the rationed amount–that’s how they ‘cut down on admissions’ (they don’t let you in), ‘reduce days in the hospital (i.e. kick you out faster), etc.

One of the local MA plans tried to hire me as their ophthalmologist years ago, offering me the princely sum of $65,000 a year to work for them. Suffice it to say that would be well over a 70% pay cut for me compared to my private practice.

So if a successful, competent doctor can make three times as much in private practice, what kind of doctor takes their offer? I think you can figure that one out for yourself. Admittedly, there are good docs who choose to go that route for the decrease in administrative headaches, but they are trading one set of headaches for another.

I worked for an HMO organization, as a resident (I had no choice, it was part of our residency program), and it was almost impossible to get them to approve the level of care their patients actually needed.

Medicare Advantage is a lot of things, but an efficient example of the power of private enterprise in medicine is NOT one of them.

EyeSurgeon on February 1, 2012 at 4:36 PM

KOOLAID2 on February 1, 2012 at 3:40 PM

I used to get the same junk mail from AARP and took a similar route as you. Except I spelled it out nice and clear for them. I took a Sharpie and wrote F*CK YOU, OBAMACARE SHILLS on the card.

After sending TWO of those back to them, it’s funny how they don’t send me anything anymore. I wonder why?

Dominion on February 1, 2012 at 4:36 PM

But . . . But . . . on TPM the lead story is

‘White House Proves GOP Wrong
Health Care Law Saved Medicare Money’

I am so confused, how can both sides claim victory?

Just kidding, my wife is a hardcore liberal Democrat, so I know exactly how facts and figures can be manipulated to suit whatever narrative they need to support.

Just find it humerous that, by and large, Conservatives can see both sides but Liberals seem incapable of the same feat of mental gymnastics.

majordomomojo on February 1, 2012 at 4:40 PM

such a federal program wouldn’t exist at all, but, as it does and as it’s highly unlikely to be abolished

Oh it will be ‘abolished’ eventually. When they run out of money and people to tax. That will occur when the 47% who currently pay NO taxes suddenly find they’re the only birds in the yard who haven’t been plucked.

GarandFan on February 1, 2012 at 5:14 PM

I feel for you, heaving a wife with a mental defect. /sarc

angrymike on February 1, 2012 at 6:08 PM


You seem to be arguing that incorporating the private into the public somehow makes the public more efficient.

But that’s just crazy talk.

For efficiency, we need to purge the private from the public altogether; and then, for maximum efficiency, move all the private into the public; and then, to further stream the line, send about 25% of the population to Moonbase Gingrich; and then — for food money, borrow some cash from Canada (until our luck changes — and it will — it has to — law of averages).

… anyone have Doritos? Mine disappeared at Occupy.

Axe on February 1, 2012 at 7:24 PM