Winners and Losers Among States in Medicare Advantage Extra Benefits: Avalere Report
Seniors in Florida got $154 in extra benefits, those in Alaska got none
By Marilyn Werber Serafini
Weighted Average Rebate 2010
Source: Avalere Health analysis of CMS data.
March 13, 2012 -
Medicare beneficiaries in private health plans throughout the country get significantly different levels of extra benefits, and that disparity
will continue with the implementation of the 2010 health law, according to an analysis released Monday by the health care consultant Avalere
Moving forward, some extra benefits that seniors are getting in these plans are likely to diminish and some are likely to
disappear altogether depending on where a senior lives, according to the report.
In Florida, for example, beneficiaries with private plans got an extra $154 a month worth of benefits in 2010, while
those in Alaska got none.
One quarter of Medicare beneficiaries get their care through private Medicare Advantage health plans, which are mostly
HMOs and PPOs.
If a plan bids less in an area than a government benchmark for traditional Medicare, then it gets a rebate of 75 percent
of the difference that it must pass along to seniors in extra benefits or lower cost-sharing. That can translate into lower prescription drug
premiums, or it can provide benefits that traditional Medicare doesnt cover, such as vision and hearing.
The data are from 2010, and the health law changes the way that Medicare pays for seniors and the disabled in Medicare
Advantage plans moving forward. However, it is likely that Medicare Advantage enrollees in areas receiving the most generous rebates will
continue to see some benefit, said Bonnie Washington, senior vice president of Avalere.
Already, as a result of the health law, the government is phasing in reduced payments to Medicare Advantage plans.
In addition, by 2014, the rebates will change so that they are partially based on quality measures, called STAR ratings.
By 2014, those plans with 4.5 or 5 stars (out of a total of 5), will get a 70 percent rebate. Those with 3.5 or 4 stars will get 65 percent,
and those scoring lower will get only 50 percent.
Starting in 2013, if a plans performance is below 3 stars for 3 consecutive years, it is booted out of the Medicare
Advantage program altogether.
This kind of shows areas where Medicare Advantage has the most room to buffer payment cuts going forward, said Jennifer
Rak, senior manager at Avalere.
Its also an indication of where the payment cuts might be harder for plans to deal with. Rural states are most
vulnerable, she said.
Avalere compared the value of the extra benefits by state, although there can be variation within a state, as rates are
actually set by county.
The average nationally was $73 per month that must be passed along to each beneficiary, according to Avalere. Florida had
the highest average rebate at $100 per beneficiary, while Alaska had an average of no rebate. States that exceeded the $73 average were
California, Florida, Louisiana, Missouri, New Mexico, Nevada, New York, Texas, and Washington, D.C.
Some of the smallest rebates in 2010 were in Delaware, Michigan, Minnesota, Montana, New Hampshire, South Dakota and
Wyoming with Alaskans on average receiving no rebate.
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