AARP Public Policy Institute INSIGHT on the Issues A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Marsha Gold, Sc.D. and Maria Cupples Hudson, M.S. Mathematica Policy Research New analysis of CMS data shows a small increase in the number of regular Medicare Advantage (MA) plans offered for individual enrollment—from 3,307 in 2008 to 3,354 in 2009; 350,000 enrollees, most in private fee-for-service plans, had to switch plans for 2009 because their plans were no longer offered. Medicare Advantage premiums and cost sharing varies substantially across plans. In choosing a plan, MA enrollees appear to have focused heavily on zero premium plans that provide some Part D coverage of the “gap” between regular and catastrophic benefits. As structured, MA plans vary in the protection provided beneficiaries against out-of-pocket costs for Part A and Part B and the costs are highest for those whose needs result in more use of care. Summary these enrollees were in PFFS plans; 15.5 percent of those in individual PFFS This report uses newly released public plans in 2008 had to change plans in data from the Centers for Medicare and 2009. The withdrawal of WellPoint and Medicaid Services (CMS) to describe its Anthem affiliates from the MSA the benefits and premiums that enrollees market as of 2009 affected four out of had from Medicare Advantage (MA) every five of the few beneficiaries in plans in 2008 and how they have MSAs. changed in 2009. It focuses on plans available to any beneficiary for Our findings show wide variability in the individual enrollment, including premiums charged by MA plans of coordinated care plans (such as health different types, as well as in the cost maintenance organizations (HMOs) and sharing enrollees face. The average MA preferred provider plans (PPOs)), private plan with prescription drugs (MA-PD) fee-for-service (PFFS) plans and medical had a premium of $63 per month in savings account (MSA) plans.1 2008, but enrollees tended to favor lower premium plans, so the average premium The number of MA plans offered for paid by an enrollee was only $46 per general individual enrollment increased month, and 54 percent were in a plan from 3,307 in 2008 to 3,354 in 2009. with no premium.2 In choosing a plan, Around 350,000 enrollees had to switch MA enrollees also appear to have plans for 2009 because their plans in focused heavily on enhanced Part D, 2008 were no longer offered. Most of with interest in enrolling in plans that A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 provide some coverage of the gap how MA benefits and premiums have between regular and catastrophic changed for enrollees in plans that will coverage. In both 2009 and 2008, continue to be available in 2009, average out-of-pocket spending for assuming no shift in enrollment. hospital and physician services among MA enrollees is lowest for HMOs and Of the 10.1 million Medicare highest for regional PPOs; however, it beneficiaries who received their benefits varies substantially with the needs of the through MA and similar private plans in beneficiary. In 2009, PFFS plan November 2008, 9.7 million were in MA premiums and benefits, on average, plans; 83 percent of these beneficiaries appear less competitive with HMOs than (8.0 million) were in plans available for they were in 2008. The change reflects individual enrollment, and the rest were PFFS benefits declining in 2009, while enrolled through group plans.4 Assuming HMOs benefits increased somewhat. In that all enrollees in special needs plans previous studies, HMOs indicated that (SNPs) were enrolled individually, 6.8 they were feeling competition from million were in plans available to any PFFS plans, so they may have responded beneficiary in the service area, and 0.9 to that in designing 2009 benefits.3 million were enrolled in SNPs that specialize in services for dually eligible Data Sources and Analysis or institutionalized persons, or those with severe chronic or disabling We analyzes the characteristics of MA conditions. Our analysis focuses on plans available for individual enrollment plans open to all beneficiaries because as reflected in the Medicare Options dual eligibility complicates the Compare—a tool CMS uses to support interpretation of SNP benefits, which are beneficiary choice on the Medicare Web designed to coordinate with Medicaid site. We downloaded files for 2008 and benefits to further limit cost sharing for 2009 showing the characteristics of qualified beneficiaries.5 The weighted plans offered to individuals under each analysis excludes approximately 350,000 MA contract and analyzed the county enrollees who could not be matched to a service area in which each plan is specific plan.6 offered to identify unique plans available in different contract segments. We used Findings CMS’s newly available public data on MA plan enrollment by contract, plan, Number of Plans, 2008–2009 and county to determine the number of In 2008, 3,307 MA plans were available enrollees selecting each plan as of July nationwide for individual enrollment, as 2008. well as an additional 769 SNPs for those who qualified. The average beneficiary The analysis includes both unweighted could choose among 44 plans (other than and weighted estimates. The unweighted SNPs), including 28 PFFS plans. At data show the characteristics of plans least 15 plans of any type were available available to beneficiaries. The weighted in 99 percent of all counties.7 estimates show the characteristics of MA benefits and premiums experienced by About two-thirds of available plans enrollees, which reflects enrollees’ included prescription drugs (Part D preferences for the features of plans they benefits) in 2008 (MA-PDs); the rest have chosen to join. Because we do not were MA-only. PFFS plans, for which know yet how enrollees are responding Part D coverage is optional, were the to changes in offerings made for 2009, most diverse (figure 1). Part D coverage the 2009 weighted estimates show only is not allowed for MSAs but is required 2 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Figure 1 Available PFFS Plans Differ More than Other Plan Types in Integrating Part D Benefits All Individual Plans 42% 26% 33% (excluding SNPs) HMOs 51% 24% 25% Local PPOs 52% 32% 17% MSAs 100% PFFS Plans 28% 25% 47% Regional PPOs 60% 19% 21% SNPs 68% 32% 0% 20% 40% 60% 80% 100% Lowest premium MA‐PD Other MA‐PD MA‐only Percentage of Available Plans By Contract and Plan Type, 2008 Notes: Plans are defined by “contract segment”—the plans offered under a contract to beneficiaries in a unique set of counties within the service area. Excludes group plans. MA-PD includes the Part D benefit. “Lowest premium MA-PD” refers to the only or lowest premium MA- PD plan offered under a particular contract in a specific geographical segment. “Other MA-PDs” are additional plans (for higher premiums) offered, where available, in specific segments. “MA-only” plans are those without Part D offered in specific contract segments. In 2008, there were 3,307 non-SNP plans and 769 SNP plans. Source: MPR analysis of CMS’s Medicare Options Compare data for AARP. for SNPs. MA contracts often subdivide In mid-2008, 65 percent of individual their service areas, with benefits varying MA enrollees (excluding those in SNPs) across contract segments, usually were in an HMO and 23 percent were in defined by counties. Sometimes a a PFFS plan (figure 3). All but 14 contract offers only one MA-PD in a percent of enrollees were in an MA-PD; segment; but often there are more than about 23 percent were in an MA-PD that one, with dual options particularly likely had a higher premium than others in PFFS plans (figure 2). What we call offered in the area under that contract by “lowest premium MA-PD” in this brief the same sponsor (figure 4). Such combines a single MA-PD plan offered enrollment in “other” MA-PD plans was under that contract in a segment and particularly likely among those in local plans with the lowest premium when PPOs. The share of enrollment in MA- more than one MA-PD plan is offered only plans was larger in PFFS plans than under that contract in the same segment. in any other plan type except for MSAs, which may not offer MA-PDs. 3 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Figure 2 Figure 3 PFFS Plans Are More Likely Than In 2008, Most MA Enrollees Were in Other Plan Types to Offer Multiple HMOs or PFFS Plans Plans in the Same Service Area Local Regional 60% 63% PPOs PPOs 8% 4% 47% 43% 39% PFFS 32% Plans 23% 27% 23% HMOs 65% HMO Local PFFS Regional Total = 6.5 million* PPO PPO Distribution of MA Enrollment, July 2008 2008 2009 *Excludes about 350,000 enrollees who Percentage of Contract Segments could not be matched to a specific plan. with More than One MA-PD Offered, Note: MSA enrollment is less than 1 percent. by Contract Type Percentage totals do not equal 100 because Note: Excludes group plans and SNPs. of rounding. Excludes enrollment in SNPs Contract segments are aggregations of one and group plans. or more counties in the contract’s service Source: MPR analysis of CMS data. area that offer plans with distinct benefits. Source: MPR analysis of CMS’s Medicare Options Compare data for AARP. enrollees. Among 2008 PFFS plan enrollees, 15.5 percent had to choose a new plan in 2009. Other PFFS plans were Availability Changes in 2009 likely available to these enrollees, since these plans are so prevalent. We do not In 2009, the number of MA plans know from these data whether enrollees available for individual enrollment has affected by a withdrawal found another risen slightly—from 3,307 to 3,354. plan (PFFS or other type) with the same (SNPs have increased from 769 to 781 sponsor or had to switch companies. (see appendix table A-1)). However, fewer PFFS plans and MSAs are In 2009, 453 PFFS plans (defined here in available for 2009, as more plans are terms of contract segments) offered in withdrawing than entering. Because 2008 by 30–40 sponsoring organizations these plans tend to have large will no longer be offered.8 Most of these geographical service areas, plan plans have no or few enrollees: 233 plans departures disproportionately affect have no enrollees, 108 have fewer than enrollees in these plan types. Our 100 enrollees, 80 have 100–999 enrollees, analysis shows that 353,180 of the 2008 and only 32 have 1,000 enrollees or more. individual MA enrollees were in non- Three firms account for half of the SNP plans no longer available to them in affected PFFS enrollees: Sterling (94,303); 2009; another 14,003 enrollees in SNPs Unicare, a WellPoint affiliate (48,971); have been similarly affected (table 1). and Wellcare (35,139). While withdrawals Withdrawals were concentrated may have a disproportionate geographic disproportionately in PFFS plans, impact on certain markets, beneficiaries accounting for 66 percent of all affected in many parts of the United States are 4 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Figure 4 PFFS and MSA Enrollees Are Most Likely to be in MA-only Plans All Individual Plans 62% 23% 14% (excluding SNPs) HMOs 69% 24% 6% Local PPOs 59% 35% 6% MSAs 100% PFFS Plans 40% 17% 42% Regional PPOs 77% 17% 6% SNPs 79% 21% 0% 20% 40% 60% 80% 100% Lowest premium MA-PD Other MA-PD MA-only Percentage of Enrollees by Contract and Plan Type, July 2008 Notes: Plans are defined by contract segment—the plans offered under a contract to beneficiaries in a unique set of counties within the service area. Excludes group plans. MA-PD includes the Part D benefit. “Lowest premium MA-PDs” refers to the only or lowest premium MA- PD plan offered under a particular contract in a specific geographical segment. “Other MA-PDs” are additional plans (for higher premiums) offered, where available, in specific segments. “MA-only” plans are those without Part D offered in specific contract segments. In 2008, there were 3,307 non-SNP plans and 769 SNP plans. Source: MPR analysis of CMS’s Medicare Options Compare data for AARP. Table 1 PFFS Plans Account for Most of Those Affected by 2009 Withdrawals, But Most MSA Enrollees Had to Choose a New Plan in 2009 2008 MA Enrollees Percentage of MA 2008 MA in Plans Not Enrollees Affected Contract Type Enrollment Available in 2009 Within Contract Type All Plans (excluding SNPs) 6,463,601 353,180 5.5% HMOs 4,230,799 79,413 1.9% Local PPOs 528,317 22,378 4.2% PFFS Plans 1,511,607 234,366 15.5% MSAs 1,723 1,365 79.2% Regional PPOs 191,155 15,658 8.2% SNPs 929,888 14,003 1.5% Note: Excludes group and SNP plans. Source: MPR analysis of CMS’s Medicare Options Compare data for AARP. 5 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 likely to feel some effects. While few A.4, respectively). beneficiaries are in MSAs, Wellpoint and its Anthem affiliates created a The average premium charged for an national MSA market in 2008; their MA-PD increased to $70 (up from $63) decision not to offer MSAs in 2009 has in 2009 (appendix table A.2); the affected four out of every five MSA average premium in MA-PD plans enrollees (table 1). continuing in 2009 is $54, $8 higher than in 2008, assuming no change in Under legislation enacted by Congress in enrollment patterns (table 2). While 2008 that will be effective in 2010, PFFS HMO premiums are virtually unchanged plans will be required to have a provider in 2009, premiums paid by enrollees in network in most locations in the country PFFS plans are substantially higher in and to submit additional information to 2009 ($81 versus $46 in 2008), and they CMS on quality and performance.9 In all are much less likely to have no premium likelihood, this will lead to more PFFS (9 percent versus 51 percent in 2008). plans withdrawing in 2010 and additional Premiums in MA-only PFFS plans are disruption for beneficiaries. increasing at a less rapid rate (appendix table A.7). Premiums, 2008–2009 Part D (Prescription Drug) In 2008, the average premium charged Benefits, 2008–2009 by MA-PDs was $63 per month (appendix table A.2). Enrollees were more likely to In both 2008 and 2009, almost all MA- select lower premium plans, so the average PDs offered what CMS defines as an enrollee paid only $46 per month, and “enhanced Part D” benefit (appendix more than half (54%) paid no premium table A.2); this means that the actuarial beyond the Part B premium that all value of the benefit is more than the Medicare beneficiaries pay (table 2).10 standard Part D benefit. Ninety-four percent of MA-PD enrollees in both Average HMO premiums were years have benefits that involve no Part somewhat lower than those for other D deductible; almost two-thirds have plan types, and premiums for enrollees some coverage in the gap between in local PPOs were substantially higher regular and catastrophic coverage than others (appendix tables A.3 and (appendix table A-2). Beneficiaries Table 2 MA-PD Premiums Vary by Plan Type Mean Premium Percentage with Zero Premium a Plan Type 2008 2009 2008 2009a All MA-PDs $46 $54 54% 49% HMOs $42 $43 58% 61% Local PPOs $86 $101 29% 18% PFFS Plans $46 $81 51% 9% Regional PPOs $46 $46 40% 44% a Assumes 2008 enrollment for plans offered in 2009. Note: Statistics are enrollment weighted and exclude group and SNP plans. Source: See appendix tables A.2– A.6. 6 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table 3 Estimated Annual Out-of-Pocket Costs for Hospital and Physician Services Differ by Plan Type and Enrollee Health Status Healthy Enrollees with Enrollees with All Enrolleesa Enrollees Episodic Needs Chronic Needs 2008 2009b 2008 2009b 2008 2009b 2008 2009b All MA-PDs $413 $421 $100 $129 $842 $815 $2,010 $1,927 HMOs $350 $323 $71 $72 $723 $657 $1801 $1670 c Local PPOs $551 $617 $267 $322 $999 $1,122 $1,887 $1,909 PFFS Plans $514 $684 $71 $240 $1,132 $1,201 $2,757 $3,147 Regional PPOsc $928 $945 $438 $418 $1,638 $1,903 $3,359 $3,150 Note: Statistics are enrollment weighted and exclude group and SNP plans. a Assumes 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs, which is equal to the distribution of community-residing beneficiaries in good, fair, and poor health. b Assumes July 2008 enrollment levels for plans offered in 2009. c Assumes use of in-network benefits. Source: See appendix tables A.1–A.5. Uses assumptions of hospital and physician use based on HealthMetrix. appear to value gap coverage—only 48 The average copayment for a primary percent of plans offered such coverage in care visit in 2008 was $10; it remains the 2008, but 63 percent of MA-PD enrollees same in 2009 (appendix table A.2). were in such a plan. The Medicare Specialist copayments are about twice as Payment Advisory Commission found high: $21 in 2008 and $22 in 2009. that MA gap coverage typically is Ninety percent of all MA-PDs also limited to generics rather than brand- require cost sharing for hospital services. name drugs and may only cover a subset The majority of MA-PDs incorporate of generic drugs.11 some limit on out-of-pocket expenses associated with such care, although 46 Cost Sharing for Physician and percent of enrollees in 2008 were in Hospital Services, 2008–2009 plans with no limit. Only 13 percent were in plans with a limit of $2,500 or Beneficiaries in traditional Medicare less annually. We do not see the sharp typically pay 20 percent coinsurance for distinctions in the characteristics of cost each Part B service, as well as a sharing between unweighted estimates deductible for each hospital admission; and enrollee weighted estimates that we MA, in contrast, usually structures cost do in premiums and gap coverage. This sharing around fixed dollar copayments. may mean that beneficiaries are These copayments have the advantage of relatively unaware of these plan features, being more transparent and predictable do not value them very highly, or find for enrollees; however, the amount the differences across plans less charged has increased over time and may important than their similarities. be more or less than the amount generated through coinsurance. Cost sharing for Parts A and B services in MA can be relatively high, however, 7 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 especially if a person needs considerable their current plan is not available for the care. Using HealthMetrix assumptions on upcoming year. (In fact, all enrollees the use of physician and hospital services may find some benefit in doing so, for MA enrollees in different health status because the options change.) Such a categories, we calculated that the annual review can be demanding, however, cost sharing for these services among given the large number of plans. The enrollees in MA-PD plans was $413 in burden on beneficiaries is increased 2008 and $421 in 2009, assuming 2008 because the kind of withdrawals enrollment patterns (table 3). Average experienced in 2009 (which required annual out-of-pocket cost sharing for these enrollees to change plans) are inherent in services per enrollee was lowest in HMOs competitive markets; in addition, ($350 in 2008), even though only 58 instability is greater in new plans and percent of 2008 HMO MA-PD enrollees associated with pricing that is statutorily were in plans with no limit on out-of- determined and unpredictable over pocket costs (51 percent in 2009; appendix time.12 CMS may want to do more to table A.3). Average out-of-pocket costs make beneficiaries aware of these per enrollee were highest in regional PPOs sources of instability, to help them make ($928 in 2008, $945 in 2009; appendix choices. table A.5). Because MA expansion occurred Across plan types, the average estimated simultaneously with the introduction of out-of-pocket costs in 2008 for sicker Part D, beneficiary support has people ranged from $723 to $1,638 for emphasized encouraging beneficiaries to those with episodic needs and from consider how their choices will affect their $1,801 to $3,359 for those with chronic premiums and out-of-pocket spending for needs (table 3). For healthy enrollees, prescription drugs. Beneficiaries are HMO and PFFS plan enrollees were encouraged, for example, to list all their about equal in likely enrollee cost drugs and use an online calculator to sharing in 2008, but the difference in determine which prescription drug cost sharing between relatively healthy coverage is their best buy. However, while and other enrollees was much smaller for such strategies deal with Part D costs, they HMOs than for all other plan types. With do not deal with out-of-pocket costs for the altered mix of PFFS plans in 2009, other Medicare benefits.13 out-of-pocket costs for the average enrollee who continues in a plan from Cost sharing in Parts A and B is 2008 is higher in 2009 and no longer on extensive, so which MA plan a a par, at least on average, with HMOs. beneficiary chooses can have a significant effect on overall out-of- Conclusion pocket health spending. Such considerations are especially important if Our analysis of MA plans in 2008 and beneficiaries have conditions that require 2009 highlights their number and them to use health services extensively. diversity, which make support critical to In a companion report also available at beneficiaries who are asked to choose aarp.org, we look at variations in the among them. While MA provides way MA plans supplement Medicare beneficiaries with many choices, the benefits—and fill in Medicare Parts A coverage they receive will vary and Part B cost sharing—to determine substantially depending on the plan they how easy it is for beneficiaries to weigh choose and their health status. In their choices and what they can expect addition, some enrollees will have to from MA as a supplement to traditional revisit their choices annually because Medicare Part A and Part B benefits. 8 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 APPENDIX Table A.1 Number of MA Plans, By Type of Contract, 2008–2009 (Excludes group plans) MA-PD Lowest All MA All Premium Other MA-Only 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 All Non-SNPs 3,307 3,354 2,232 2,346 1,386 1,464 846 882 1,075 1,008 HMOs 1,517 1,730 1,138 1,305 768 837 370 468 379 425 L-PPOs 462 548 384 453 238 287 146 166 78 95 MSAs 14 9 0 0 0 0 0 0 14 9 PFFS Plans 1,271 1,016 676 555 354 314 322 241 595 461 R-PPOs 43 51 34 33 26 26 8 7 9 18 SNPs 769 781 769 781 526 528 243 253 0 0 Note: Plans are defined by contract segment and are those offered under a contract to beneficiaries in a unique set of counties within the service area. “Lowest premium” refers to the only or lowest premium plan offered under a particular contract in a specific geographical segment. “Other” MA-PDs are additional plans (for higher premiums) offered, where available, in specific segments. “MA-only” plans are those without Part D offered in specific contract segments. Source: MPR analysis of CMS Medicare Options Compare data. 9 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table A.2 Profile of Benefits and Premiums, All MA-PD Plans, 2008–2009 (SNPs and group plans excluded) Weighteda Unweighted Characteristics 2008 2009 2008 2009 Premiums Total Premium (Mean for Parts C and D) $46 $54 $63 $70 Percentage with Zero Premium 54% 49% 36% 36% Percentage with Reduced Part B Premium 2% 2% 7% 5% Part D Part D Premium (Mean) $12 $15 $18 $20 Enhanced Part D (Percentage) 93% 95% 89% 87% Has Some Gap Coverage (Percentage) 63% 68% 48% 50% Has No Rx Deductible (Percentage) 94% 94% 87% 88% Cost Sharing Primary Care Copay (Mean) $10 $10 $11 $10 Specialist Copay (Mean) $21 $22 $23 $23 Percent with Inpatient Hospital Cost Sharing 90% 90% 90% 90% Limits on Out-of-Pocket Mean Maximum Out-of-Pocket Limit $3,624 $5,428 $3,487 $5,382 No Maximum Limit 46% 39% 34% 30% <$1,000 2 1 1 1 $1,001 – $2,500 11 9 12 14 $2,501 – $4,000 27 35 39 40 $4,001 – $5,000 13 5 11 8 More than $5,000 2 11 2 7 Average Estimated Hospital and Physician Cost Sharingb All Enrollees $413 $421 $454 $460 Healthy Enrollees $100 $129 $149 $168 Enrollees with Episodic Needs $842 $815 $878 $849 Enrollees with Chronic Needs $2,010 $1,927 $2,000 $1,982 Enrollment/Contract Segments 5,533,795 5,460,421 2,232 2,346 a Weighted numbers for both 2008 and 2009 use enrollment from July 2008 at the contract-plan-county level. The 2009 numbers do not reflect 2009 changes in enrollment. b Based on HealthMetrix assumptions as to how many hospital and physician services are used by those in the three health status groups, applied to the plan’s cost sharing. The “All enrollees” row is a standardized mix of about 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs based on community residents in the Medicare Current Beneficiary Survey (MCBS). Source: MPR analysis for AARP’s Public Policy Institute from files created from CMS’s Medicare Options Compare. (Total enrollment excludes 929,806 in MA-only plans and 929,888 in SNPs in 2008, as well as group enrollees and enrollees unable to be matched to a plan in a specific county.) 10 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table A.3 Profile of Benefits and Premiums, All MA-PD HMO Plans, 2008–2009 (SNPs and group plans excluded) Weighteda Unweighted Characteristics 2008 2009 2008 2009 Premiums Total Premium (Mean for Parts C and D) $42 $43 $49 $52 Percentage with Zero Premium 58% 61% 51% 51% Percentage with Reduced Part B Premium 2% 3% 10% 7% Part D Part D Premium (Mean) $10 $11 $13 $15 Enhanced Part D (Percentage) 93% 96% 88% 89% Has Some Gap Coverage (Percentage) 58% 65% 49% 51% Has No Rx Deductible (Percentage) 95% 95% 88% 89% Cost Sharing Primary Care Copay (Mean) $9 $8 $8 $8 Specialist Copay (Mean) $20 $20 $21 $20 Percent with Inpatient Hospital Cost Sharing 90% 87% 85% 85% Limits on Out-of-Pocket Mean Maximum Out-of-Pocket Limit $3,163 $5,966 $3,057 $7,264 No Maximum Limit 58% 51% 55% 45% <$1,000 2 1 1 1 $1,001 – $2,500 9 8 13 11 $2,501 – $4,000 28 38 26 39 $4,001 – $5,000 2 2 3 3 More than $5,000 1 0 1 0 Average Estimated Hospital and Physician Cost Sharingb All Enrollees $350 $323 $384 $334 Healthy Enrollees $71 $72 $124 $84 Enrollees with Episodic Needs $723 $657 $734 $670 Enrollees with Chronic Needs $1,801 $1,627 $1.732 $1,638 Enrollment/Contract Segments 3,988,270 4,017,001 1,138 1,305 a Weighted numbers for both 2008 and 2009 use enrollment from July 2008 at the contract-plan-county level. These numbers do not reflect 2009 changes in enrollment. b Based on HealthMetrix assumptions regarding how many hospital and physician services are used by those in the three health status groups, applied to the plan’s cost sharing. The “All enrollees” row is a standardized mix of about 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs, based on community residents in the MCBS. Source: analysis for AARP’s Public Policy Institute from files created from CMS’s Medicare Options Compare e. 11 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table A.4 Profile of Benefits and Premiums, All MA-PD Local PPO Plans, 2008–2009 (SNPs and group plans excluded) Weighteda Unweighted Characteristics 2008 2009 2008 2009 Premiums Total Premium (Mean for Parts C and D) $86 $101 $88 $91 Percentage with Zero Premium 29% 18% 22% 19% Percentage with Reduced Part B Premium 8% 1% 4% 2% Part D Part D Premium (Mean) $23 $29 $25 $28 Enhanced Part D (Percentage) 84% 84% 86% 85% Has Some Gap Coverage (Percentage) 61% 60% 53% 53% Has No Rx Deductible (Percentage) 86% 85% 84% 83% Cost Sharingb Primary Care Copay (Mean) $8 $10 $11 $11 Specialist Copay (Mean) $18 $19 $22 $22 Percent with Inpatient Hospital Cost Sharing 97% 97% 95% 98% Limits on Out-of-Pocket Mean Maximum Out-of-Pocket Limit $3,258 $3,081 $3,799 $3,400 No Maximum Limit 11% 17% 15% 20% <$1,000 1% 0 1% 2% $1,001 – $2,500 39% 37% 15% 24% $2,501 – $4,000 30% 27% 43% 39% $4,001 – $5,000 15% 14% 21% 11% More than $5,000 3% 3% 6% 4% c Average Estimated Hospital and Physician Cost Sharing All Enrollees $551 $617 $612 $598 Healthy Enrollees $267 $322 $332 $303 Enrollees with Episodic Needs $999 $1,122 $1,016 $1,058 Enrollees with Chronic Needs $1,887 $1,909 $2,000 $1,999 Enrollment/Contract Segments 496,187 449,793 384 453 a Weighted numbers for both 2008 and 2009 use enrollment from July 2008 at the contract-plan-county level. These numbers do not reflect 2009 changes in enrollment. b Applies to in-network benefits c Based on HealthMetrix assumptions regarding how many hospital and physician services are used by those in the three health status groups, applied to the plan’s cost sharing. The “All enrollees” row is a standardized mix of about 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs, based on community residents in the MCBS. Source: analysis for AARP’s Public Policy Institute from files created from CMS’s Medicare Options Compare . 12 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table A.5 Profile of Benefits and Premiums, MA-PD Regional PPO Blans, 2008–2009 (SNPs and group plans excluded) Weighteda Unweighted Characteristics 2008 2009 2008 2009 Premiums Total Premium (Mean for Parts C and D) $46 $46 $84 $83 Percentage with Zero Parts C and D Premium 40% 44% 15% 18% Percentage with Reduced Part B Premium 0% 0% 0% 0% Part D Part D Premium (Mean) $11 $17 $21 $27 Enhanced Part D (Percentage) 90% 89% 88% 82% Has Some Gap Coverage (Percentage) 60% 59% 68% 64% Has No Rx Deductible (Percentage) 90% 89% 88% 82% b Cost Sharing Primary Care Copay (Mean) $10 $14 $11 $14 Specialist Copay (Mean) $22 $29 $25 $32 Percent with Inpatient Hospital Cost Sharing 100% 100% 100% 100% Limits on Out-of-Pocket Mean Maximum Out-of-Pocket Limit $5,311 $5,831 $5,385 $6,811 No Maximum Limit <$1,000 0% 0% 0% 0% $1,001 – $2,500 0% 0% 3% 0% $2,501 –$4,000 30% 43% 21% 18% $4,001 – $5,000 33% 7% 47% 9% More than $5,000 37% 51% 29% 73% Average Estimated Hospital and Physician Cost Sharingc All Enrollees $928 $945 $823 $935 Healthy Enrollees $438 $418 $410 $400 Enrollees with Episodic Needs $1,638 $1,903 $1,447 $1769 Enrollees with Chronic Needs $3,359 $3,150 $2,825 $3,458 Enrollment/Contract Segments 179,509 163,851 34 33 a Weighted numbers for both 2008 and 2009 use enrollment from July 2008 at the contract-plan-county level. These numbers do not reflect 2009 changes in enrollment. b Applies to in-network benefits. c Based on HealthMetrix assumptions regarding how many hospital and physician services are used by those in the three health status groups, applied to the plan’s cost sharing. The “All enrollees” row is a standardized mix of about 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs, based on community residents in the MCBS. Source: analysis for AARP’s Public Policy Institute from files created from CMS’s Medicare Options Compare . 13 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table A.6 Profile of Benefits and Premiums, MA-PD PFFs Plans, 2008–2009 (SNPs and group plans excluded) Weighteda Unweighted Characteristics 2008 2009 2008 2009 Premiums Total Premium (Mean for Parts C and D) $46 $81 $71 $95 Percentage with Zero Parts C and D Premium 51% 9% 19% 14% Percentage with Reduced Part B Premium 0% 2% 5% 1% Part D Part D Premium (Mean) $15 $27 $21 $26 Enhanced Part D (Percentage) 98% 98% 93% 85% Has Some Gap Coverage (Percentage) 84% 85% 43% 45% Has No Rx Deductible (Percentage) 97% 99% 85% 92% Cost Sharing Primary Care Copay (Mean) $14 $15 $15 $15 Specialist Copay (Mean) $27 $29 $27 $28 Percent with Inpatient Hospital Cost Sharing 88% 99% 94% 97% Limits on Out-of-Pocket Mean Maximum Out-of-Pocket Limit $4,527 $5,119 $3,577 $4,088 No Maximum Limit 20% 0% 11% 5% <$1,000 0% 0% 1% 1% $1,001 – $2,500 5% 4% 10% 12% $2,501 – $4,000 18% 23% 60% 45% $4,001 – $5,000 57% 17% 18% 16% More than $5,000 0% 57% 0% 21% b Average Estimated Hospital and Physician Cost Sharing All Enrollees $514 $684 $462 $614 Healthy Enrollees $71 $240 $74 $241 Enrollees with Episodic Needs $1,132 $1,201 $1,012 $1045 Enrollees with Chronic Needs $2,757 $3,147 $2,410 $2,689 Enrollment/Contract Segments 869,829 829,776 676 555 a Weighted numbers for both 2008 and 2009 use enrollment from July 2008 at the contract-plan-county level. These numbers do not reflect 2009 changes in enrollment. b Based on HealthMetrix assumptions regarding how many hospital and physician services are used by those in the three health status groups, applied to the plan’s cost sharing. The “All enrollees” row is a standardized mix of about 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs, based on community residents in the MCBS. Source: analysis for AARP’s Public Policy Institute from files created from CMS’s Medicare Options Compare . 14 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 Table A.7 Profile of benefits and premiums, MA-only PFFs plans, 2008–2009 (SNPs and group plans excluded) Weighteda Unweighted Characteristics 2008 2009 2008 2009 Premiums Total Premium (Mean for Parts C and D) $16 $18 $22 $37 Percentage with Zero Premium 60% 72% 58% 40% Percentage with Reduced Part B Premium 1% 1% 16% 3% Cost Sharing Primary Care Copay (Mean) $11 $12 $13 $13 Specialist Copay (Mean) $21 $23 $25 $24 Percent with Inpatient Hospital Cost Sharing 92% 99% 91% 96% Limits on Out-of-Pocket Mean Maximum Out-of-Pocket Limit $2,670 $3,087 $3,116 $3,146 No Maximum Limit 38% 5% 20% 12% <$1,000 7% 1% 2% 1% $1,001 – $2,500 21% 34% 16% 24% $2,501 – $4,000 33% 60% 58% 59% $4,001 – $5,000 1% 0% 3% 4% More than $5,000 0% 0% 0% 0% Average Estimated Hospital and Physician Cost Sharingb All Enrollees $329 $531 $418 $541 Healthy Enrollees $76 $236 $93 $246 Enrollees with Episodic Needs $699 $904 $884 $881 Enrollees with Chronic Needs $1,574 $2,105 $2,033 $2,187 Enrollment/Contract Segments 641,778 475,184 595 461 a Weighted numbers for both 2008 and 2009 use enrollment from July 2008 at the contract-plan-county level. These numbers do not reflect 2009 changes in enrollment. b Based on HealthMetrix assumptions regarding how many hospital and physician services are used by those in the three health status groups, applied to the plan’s cost sharing. The “All enrollees” row is a standardized mix of about 72 percent healthy, 19 percent with episodic needs, and 9 percent with chronic needs, based on community residents in the MCBS. Source: analysis for AARP’s Public Policy Institute from files created from CMS’s Medicare Options Compare . 15 A First Look at How Medicare Advantage Benefits and Premiums in Individual Enrollment Plans Are Changing from 2008 to 2009 7 Endnotes Marsha Gold, “Medicare’s Private Plans: A Report Card on Medicare Advantage,” Health Affairs, Web Exclusive, November 24, 2008 Available at 1 www.healthaffairs.org. Enrollment in MSAs was very low in 2008 (see figure 3), and their benefits are unique; therefore, 8 The Medicare Options Compare lists 38 we exclude them from most analyses in this brief. organizational names; a few have joint ownership INSIGHT on the Issues 2 (e.g., Unicare, Blue Cross of California, and Such premiums are in addition to the standard Part B premium paid by all beneficiaries. The low Empire Blue Cross-Blue Shield). level of MA premiums reflects, in part, Medicare 9 These provisions are in the Medicare payment levels that exceed those in the traditional Improvements for Patients and Providers Act program. (See C. Zarabozo and S. Harrison, (MIPPA) of 2008. “Payment Policy and the Growth of Medicare 10 Advantage,” Health Affairs, Web Exclusive, This is the combined premium charged for Parts November 24, 2008) Available at C and D after rebates, and is in addition to the www.healthaffairs.org. regular premium all Medicare beneficiaries pay for 3 Part B coverage. Marsha Gold, “Medicare’s Private Plans: A 11 Report Card on Medicare Advantage,” Health Medicare Payment Advisory Commission, Affairs, Web Exclusive, November 24, 2008 “Chapter 4: Part D Enrollment, Benefit Offerings Available at www.healthaffairs.org. and Plan Payments,” in Report to Congress: 4 Medicare Payment Policy, Washington, DC, March CMS’s monthly summary report on Medicare 2008, pp. 277–304. Advantage cost, Program for All Inclusive Care for 12 Elderly (PACE), demonstration, and prescription For previous analysis of Medicare+Choice, see, drug plan contracts, July 2008. MA plans are for example, Marsha Gold , Beth Stevens, Lori specifically authorized by the Medicare Achman and Jessica Mittler. Monitoring Modernization Act of 2003 (MMA) and include Medicare+Choice: What Have We Learned: local coordinated care plans (primarily HMOs and Findings and Operational Lessons for Medicare PPOs), PFFS plans, regional PPOs, and MSAs, Advantage, Mathematica Policy Research, along with SNPs that coordinated care contracts Washington, DC, August 2004. may offer. The total enrollment figure also includes 13 Using estimates from the 2003–2004 Medicare a small number of enrollees in other plans that Current Beneficiary Survey, the Medicare Options beneficiaries may find indistinguishable from MA Compare provides estimates of the aggregate of plans. These plans include cost, Health Care these costs for a person in his or her age and health Prepayment Plan (HCPP), PACE, and various status group, but these estimates have important demonstration plans. limitations. The way data are reported also makes it 5 For additional details on SNPs, see James hard to compare out-of-pocket spending for MA Verdier, Marsha Gold, and Sarah Davis, Do We with the traditional Medicare that beneficiaries are Know If Medicare Advantage Special Needs Plans likely to purchase with a PDP or Medigap plan. Are Special? Kaiser Family Foundation, (The estimates of out-of-pocket costs do not reflect Washington, DC, January 2008; and Marsha Gold, prescription drug coverage unless it is integrated Maria Cupples Hudson, and Sarah Davis, 2006 with the Medicare A/B plan, according to notes Medicare Advantage Benefits and Premiums, embedded in the Medicare Options Compare.) Report # 2006-23, AARP Public Policy Institute, Washington, DC, November 2006. Insight on the Issues 25, March 2009 6 To support our analysis, we matched plan IDs and county codes to link county-based plan enrollment AARP Public Policy Institute, 601 E Street, and the service areas of specific plans. Some of NW, Washington, DC 20049. these codes could not be matched to data in the www.aarp.org/ppi. Medicare Options Compare. The total enrollment 202-434-3890, ppi@aarp.org in the data set we developed is less than that © 2009, AARP. reported for individual enrollment in CMS’s Reprinting with permission only. monthly aggregate report. We assume that these discrepancies occur because of privacy concerns, CMS does not report enrollment at the plan-county level if a plan has fewer than 10 enrollees. 16