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CMS proposes lower Part D deductibles, slashed insurer payments for Medicare Advantage plans

February 19, 2013
by Pamela Tabar, Senior Editor
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For the first time, seniors will see their Medicare Part D out-of-pocket costs go down. But government payments to insurers offering the Medicare Advantage plans will be going down, too.

Medicare spending grew by only about 3 percent in 2012, its slowest growth in a decade, according to a Congressional Budget Office report released earlier this month. The reduced figures prompted the Centers for Medicare & Medicaid Services (CMS) to propose cuts in the Medicare Part D standard deductible, projected at $310 for 2014—4.6 percent lower than this year. The slow-up in healthcare spending also will result in a projected 2.2-percent cut in payments to the insurers who carry the Medicare Advantage program. In 2012, more than 13 million people took part in the Medicare Advantage plans.

“The Affordable Care Act helps us strengthen Medicare Advantage and Part D,” said Jonathan Blum, CMS acting principal deputy administrator and director of the CMS’ Center for Medicare, in a CMS release posted Friday. “We are working to ensure that people with Medicare have affordable access to health and drug plans, while making certain that plans are providing value to Medicare and taxpayers.”

Stock prices dropped Tuesday for Humana and UnitedHealth, the two insurers who carry the nation’s largest portfolios of Medicare Advantage beneficiaries, as jittery investors reacted to the initial news, according to the Associated Press coverage.

CMS is expected to announce the final rates in April.

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