Article

MA Enjoyed Great Success, but Faces Greater Challenges, CMS' Cavanaugh Says

Author(s):

The Affordable Care Act’s changes in payment and reduction in benchmarks in Medicare Advantage raised questions about the future of the program that ended up being unfounded, said Sean Cavanaugh, deputy administrator and director of the Center for Medicare at CMS, during the opening keynote at America’s Health Insurance Plans’ National Conference on Medicare, held October 24-25 in Washington, DC.

The Affordable Care Act (ACA)’s changes in payment and reduction in benchmarks in Medicare Advantage (MA) raised questions about the future of the program that ended up being unfounded, said Sean Cavanaugh, deputy administrator and director of the Center for Medicare at CMS, during the opening keynote at America’s Health Insurance Plans’ National Conference on Medicare, held October 24-25 in Washington, DC.

The MA program has seen significant enrollment growth so that it now covers 32% of all Medicare beneficiaries. In fact, the MA program has been growing much faster than the Medicare program itself, Cavanaugh said.

Another concern had been the effect the ACA would have on premiums. Cavanaugh showed that premiums are actually down from the pre-ACA days and have been remarkably stable over the period of time since the implementation of the law. In fact, the forecast for 2017 calls for a slight reduction (-4%) in premiums, which would be the second year in a row of premium reductions.

Plus, access to the MS program remains strong. While the number of counties without access to an MA plan will go up next year, they will be less populated counties, so the percentage of Medicare beneficiaries without access to an MA plan will remain largely unchanged.

With such strong growth in MA enrollment and premiums going down year over year, it was important to determine that quality of care remained high, Cavanaugh said. In 2009, just 17% of beneficiaries were in MA plans that had received 4 or 5 stars in the Medicare quality program. In comparison, 71% of beneficiaries in 2016 were in plans with 4 or 5 stars.

The forecast for 2017 predicts a slight decline to 68% of beneficiaries in 4- or 5-star plans, but there are a number of sizable plans contesting their 2017 ratings. Still, it's important to keep on eye on this trend to determine if the decline for 2017 is a blip and the upward trend will resume in 2018, or if the program is plateauing, Cavanaugh said.

However, it’s not all good news for the MA program. The Part D premium is going up slightly in 2017.

“While we have successfully held down premiums, I think it’s very important to note that there are cost problems in the Part D program we have to address,” Cavanaugh said.

In 2015, there was an 11.6% growth in the cost per beneficiary in the Part D program, and in 2016, the cost will go up by more than 10% for 2 years in a row of double-digit growth.

Part D is one of the fastest growing parts of the Medicare program, and Cavanaugh acknowledged that the rising cost of prescription drugs is not unique to Medicare. It does raise a lot of questions that need answers, such as what the rising cost of Part D means for MA and what tools CMS has to constrain the costs so beneficiaries continue to have access to these drugs.

So what does the future of MA hold? Multiple forecasts from a variety of agencies and organizations do predict that enrollment and penetration of MA plans will plateau in a few years. CMS has been considering why that might be, and that means understanding why some beneficiaries choose MA to begin with and why others make the conscious decision not to enroll in MA.

In the future, CMS will have to gain a better handle on management of the catastrophic coverage part of Part D. Once enrollees reach catastrophic coverage, Medicare pays the majority of their drug costs. Cavanaugh showed that from 2010 to 2014, the catastrophic benefit became more and more prominent. While the numbers for 2015 and 2016 are not finalized and, therefore, haven’t officially been released, he did note that the number of beneficiaries reaching the catastrophic coverage benefit has grown dramatically.

“The government is bearing most of the risk [for catastrophic coverage],” Cavanaugh said. “How do we get better management of the catastrophic part?”

One idea is to shift more and more cost to the Part D plans, but that’s not the sole answer to the issue.

Ultimately, while MA has been very successful, there are a number of major concerns to think about for the future of MA and the Part D plan, Cavanaugh said.

“Things have never been better, and the challenges have never been greater,” he said.

Related Videos
Screenshot of an interview with Amir Ali, PharmD, BCOP
Mansi Shah, MD, assistant professor, Rutgers Cancer Institute of New Jersey
 Alvaro Alencar, MD, associate professor of clinical medicine, chief medical officer, University of Miami Sylvester Comprehensive Cancer Center
Dr Cesar Davila-Chapa
Screenshot of an interview with Nadine Barrett, PhD
Milind Desai, MD
Masanori Aikawa, MD
Neil Goldfarb, GPBCH
Mabel Mardones, MD.
Mei Wei, MD, an oncologist specializing in breast cancer at Huntsman Cancer Institute at the University of Utah.
Related Content
AJMC Managed Markets Network Logo
CH LogoCenter for Biosimilars Logo