Federal regulators on Monday said 2016 payments to insurers that offer private Medicare plans will go up compared to this year, reversing a slight decline proposed in February. CMS estimated that the government’s Medicare Advantage payments will go up about 1.25% next year, though the agency said that insurers will likely see overall revenue increase 3.25% as they deliver, and bill for, more intensive services.
In the February proposal, the agency said 2016 payments would decline 0.95% on average, though the insurance industry would likely have seen overall revenue increase 1.05% when including the service-intensity effect. CMS said the new modification in the spending growth rate estimates stemmed from factors including “higher than expected spending on inpatient hospitalizations” and on other services such as therapy and rural health clinics.
About 17 million people are enrolled in Medicare Advantage plans, according to consulting firm Avalere Health. That is up from 15.9 million last year and 12.2 million in 2011, the firm said.
Federal payments for Medicare Advantage coverage, not including Part D prescription-drug plans, were projected to total about $155 billion this year.
Wall Street Journal: Medicare Advantage Payments to Rise for 2016