Two Major Medicare Advantage Developments
Two major Medicare Advantage (MA) developments today.
Modern Healthcare reports that MA plans are pushing the Centers for Medicare and Medicaid Services (CMS) to change the $40 per member per month total beneficiary cost threshold that has been in place since 2024. Plans say this is needed so as to allow scaling back benefits more to respond to rising costs and paltry rate hikes.
The 2027 proposed hike is roughly flat due to several changes in how risk adjustment will be applied. It could increase some (say to between 2% and 3%) but the final hike will not be near the cost growth in the program (that was as much as 9% coming into the year) or the over 5% hike last year.
Plans have been reducing geographic footprints, shuttering expensive Preferred Provider Organization (PPO) products, and reducing benefits the past few years. But benefit reductions are constrained by the $40 benefit cost threshold. And plans know they will need to pare benefits again in 2027.
Humana and Scan are two big plans that have seen enrollment jump tremendously and are among plans asking for the change. The cap on total beneficiary cost was introduced in 2012 and is meant to be a consumer protection but does not appear to be keeping up with the huge trend in the program. In February, CMS proposed maintaining the $40 per member per month total beneficiary cost threshold that has been in place since 2024. The agency intends to finalize it in April.
Meanwhile, President Trump’s Medicare director said CMS may consider default enrollment of new Medicare beneficiaries. The proposal could automatically enroll beneficiaries into MA or traditional Medicare accountable care organizations (ACOs). Individuals could then opt out to different coverage. Right now, people who don’t make a choice are covered by traditional Medicare.
Additional article: https://www.statnews.com/2026/03/20/medicare-advantage-default-enrollment-chris-klomp-project-2025/
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#medicareadvantage #coverage #cms #healthplans #medicare
https://www.modernhealthcare.com/insurance/mh-cms-medicare-advantage-benefits-humana-scan
Hospital Ads May Drive Admissions
A new study from the University of Pennsylvania says hospital advertising may drive increased emergency admissions and care for Medicare beneficiaries. The study looked at a national ad database and Medicare claims from January 2015 to November 2016. Th study found a modest effect of ads on patient volume and inpatient care spending. Researchers found that a 10% increase in hospital ads in a regional market increased hospital admissions by nine admissions per 100,000 Medicare beneficiaries. Inpatient stays resulting from emergency department visits were also “slightly more responsive” to the advertising.
Pharmaceutical ads remain the highest share of healthcare advertising, but hospital ads were $1.4 billion in 2016, an increase of 258% since 1997.
#hospitals #admissions #medicare
— Marc S. Ryan
