Medicare Advantage plans to drop next year

There will be fewer Medicare Advantage plans in 2014.

The main reason? “Continued payment reductions enacted under the Patient Protection and Affordable Care Act,” Avalere Health found.

The total number of MA plans will decline 5.3 percent — from 2,664 plans in 2013 to 2,522 in 2014, the consulting firm said. Researchers analyzed the MA, Special Needs Plans and Part D landscape files released by CMS.

About 80 percent of counties in the South and Midwest will see a reduction in plan options, while slightly more than half of the counties in the Northeast and West will have fewer plan options, Avalere said.

“The multitude of payment changes for MA plans under [PPACA] are taking root and starting to broadly impact the number and types of plans available in the market,” said Matt Eyles, executive vice president of Avalere Health.

Factors driving MA participation decline include "the continued phase-in of payment cuts enacted under the PPACA; modifications to the CMS risk adjustment model; implementation of new medical loss ratio requirements for MA plans; and application of the new health insurer fee," Avalare Health said.

The analysis company also noted there will be a 13 percent drop in Special Needs Plans in 2014. UnitedHealth is driving the decline in C-SNPs, as the sponsor will withdraw 65 C-SNPs from the market. Notably, UnitedHealth had introduced 46 new C-SNPs just last year.

Additionally, MA HMO offerings are expected to grow while Preferred Provider Organization offerings will decline.

Some Medicare patients can also expect their Part D standalone prescription drug plans premiums to increase. On average, PDP premiums will increase by 5.1 percent overall, but five out of top 10 prescription drug plans will have a double digit increase.

One plan with a huge increase? That distinguishment belongs to AARP MedicareRx Saver Plus (sponsored by UnitedHealth).

Though that plan had the lowest premiums in 2013, Avalere said it has been approved by CMS for 2014 with the highest percentage increase with premiums jumping 55 percent from $15 to $23.22.

By contrast, premiums for WellCare Classic will decline sharply in 2014, by 38 percent from $33.54 to $20.72.

Also read: Can Medicare Advantage survive PPACA?

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