CMS' proposed Medicare Advantage 2017 rates spark insurer shares boost
- Friday, CMS unveiled proposed rates for the Medicare Advantage and Part D Prescription Drug programs.
- Medicare Advantage has reached record enrollments since the ACA was implemented. More than 17.1 million beneficiaries have enrolled in the program, a cumulative increase of 50% since 2010.
- According to the agency, the proposed rates would change year-to-year expected average revenues by a gain of 1.35% and by 3.55% with risk coding trends. Upon release of the news, shares of insurers rose in after-hours trading.
Nearly 32% of Medicare beneficiaries are enrolled in a Medicare Advantage plan. The agency added average Medicare Advantage premiums have decreased by about 10% since 2010.
With so many consumers in Medicare's private insurance program, many insurers are looking to Medicare Advantage as a huge growth opportunity, Politico Pulse noted.
“These proposals continue to keep Medicare Advantage strong and stable and as with this past year, support the provision of high quality, affordable care to seniors and people living with disabilities," said CMS Acting Administrator Andy Slavitt in a prepared release. “In particular, these proposals support investment in dually Medicare-Medicaid eligible individuals and those with complex socioeconomic needs.”
Upon release of the news, shares of health insurers rose in after-hours trading, according to Reuters. Anthem Inc’s shares rose by 1.4%, while UnitedHealth Group saw a gain of 1.6%.
Increase in shares comes at the same time Medicare Advantage has seen greater support from both Republican and Democratic lawmakers, in addition to increasing popularity among senior consumers, according to Morning Consult. Before CMS released the rate notice release on Friday, both House and Senate lawmakers had already sent letters to the agency asking no reductions be made to program.
Included in the release are proposals to improve payments to plans serving dually eligible or low income beneficiaries. "CMS proposes to adjust Star Ratings to reflect the socioeconomic and disability status of a plan’s enrollees," the agency noted, adding, "CMS proposes to revise the methodology used to risk adjust payments to plans to more accurately reflect the cost of care for dually eligible beneficiaries."
Notable changes to the Part D program include expectations for Part D plans to implement edits to prevent opioid overutilization at point of sale. Part D formulary and plan benefit designs that hinder access to medication-assisted treatment will not be approved, the agency noted.
The final rates will be published by April 4.
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