Older Americans enrolled in privately administered Medicare Advantage plans will see their rates drop slightly, thanks to federal negotiators who shot down contracts for high-cost plans.
Predictions that Medicare Advantage rates would rise did not take into account the new authority delegated to the Centers for Medicare and Medicaid Services under the Affordable Care Act, which begins taking effect this week.
"The Affordable Care Act gave us new authority to negotiate with health plans in a competitive marketplace," CMS head Dr. Donald Berwick told reporters during a conference call. "As a result, our beneficiaries will save money and maintain their benefits."
In fact, said Health & Human Services secretary Kathleen Sebelius, despite the "gloom and doom" the program is "stronger than ever before."
Negotiations with companies offering roughly 300 Medicare Advantage plans, which were proposing to boost costs for members — and their own profit margins — cut out-of-pocket costs by $156 per year, according to Center for Medicare director Jonathan Blum. That means the average monthly premium will drop 45 cents, from $36.14 to $35.69.
But not all seniors will see their premiums reduced. And 2,300 beneficiaries in Colorado and Utah won’t be eligible for the program next year, when the changes go into effect, Berwick said.