Fact Sheets

Fact Sheet: Moving Medicare Advantage and Part D forward

Fact Sheet: Moving Medicare Advantage and Part D forward

Since passage of the Affordable Care Act, both the Medicare Advantage and the Part D programs have continued to grow as premiums remain stable and quality improves. Thanks to the successful implementation of the Affordable Care Act’s reforms, Medicare Advantage and Part D will continue to provide greater protections for beneficiaries and value for taxpayers.

Since the Affordable Care Act was passed in 2010:

• Medicare Advantage premiums have fallen by nearly 10 percent.
• Medicare Advantage enrollment has increased by more than 50 percent to an all-time high of more than 17.4 million beneficiaries, with nearly 32 percent of Medicare beneficiaries enrolled in a Medicare Advantage plan.
• Medicare Advantage enrollees are benefiting from greater quality, with approximately 65 percent of enrollees now in plans with four or more stars, a significant increase from an estimated 17 percent of enrollees in such plans in 2009.
• Access to the Medicare Advantage program remains nearly universal, with 99 percent of beneficiaries having access to a plan in their area.  
• The average number of plan choices per beneficiary remains consistent in 2016 as compared to 2015, and access to supplemental benefits, such as dental and vision benefits, is growing.
• Over 95 percent of Medicare beneficiaries have access to a $0 premium Medicare Advantage plan.
• 100 percent of Medicare beneficiaries – including Medicare Advantage enrollees – have access to recommended Medicare-covered preventive services at zero cost sharing.
• The Centers for Medicare & Medicaid Services (CMS) has taken other steps to strengthen the Medicare Advantage program that include:
  • Allowing Medicare beneficiaries to a one-time opportunity to switch to a 5-star MA plan or Part D plan in their area anytime during the year.
  • Continuing the inclusion of a low performing icon on the Medicare.gov website so beneficiaries know which plans are not performing well.
  • Implementing the Affordable Care Act requirement that all Medicare Advantage plan sponsors spend at least 85 percent of premiums on quality and care delivery and not on overhead, profit or administrative costs.
• Part D enrollees are benefiting from quality improvement among plans, with about one-third of prescription drug plan enrollees in plans with four or more stars, compared to 27 percent of enrollees in such plans in 2009.
• The average premium for a basic Medicare Part D prescription drug plan in 2016 will remain stable, at an estimated $32.50 per month. In 2010, the average premium for such a plan was $31.94.  

Moving Medicare Forward – Greater Value for the Medicare Advantage and Part D Programs

The 2016 Rate Announcement and Call Letter advance broader efforts at the Department of Health and Human Services and CMS to move the Medicare Advantage and Part D programs toward value and quality. The Administration has announced an effort to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity, of care they give to patients. Through the policies finalized in the Rate Announcement and Call Letter, CMS is moving to further align the Medicare Advantage and Part D programs with those goals.  

• Higher Quality of Care – The 2016 Rate Announcement and Final Call Letter includes updates to the star rating system used to assess the performance of plans in providing enrollees with high quality care. These updates will strengthen the accuracy of the evaluation system. The Call Letter also includes a commitment to further study the relationship between dual-eligible or Low Income Subsidy (LIS) status enrollees and plan performance. To this end, CMS released preliminary results on the possible sensitivity of the Medicare Advantage and Part D Star Ratings to the percentage LIS and/or dual eligible enrollees in February 2015, with additional research findings released in early September 2015.
• More Information for Enrollees – The 2016 Call Letter improves the information available to beneficiaries regarding plan networks, including an emphasis on requirements for plans to maintain accurate provider directories.
• Payment Reform – The 2016 Call Letter announces CMS’ intention to work with plans to collect information on the adoption of valued-based payment models among health plans. The CMS Innovation Center recently announced the Medicare Advantage Value-Based Insurance Design (VBID) Model, which will test whether such models can improve health outcomes and lower expenditures for Medicare Advantage enrollees in the future.

For more information on the premiums and costs of 2016 Medicare Advantage and Part D plans, please visit: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/index.html.  

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