By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    physical health
    5 Ways Playing Games Can Improve Neural and Physical Health
    September 9, 2022
    Reasons For Hair Loss and Its Treatment
    Reasons For Hair Loss and Its Treatment
    February 16, 2022
    healthcare organization
    5 Actionable Strategies For Healthcare Organizations
    August 15, 2022
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    What Would You Do?
    January 28, 2013
    How Martin Shkreli is driving down drug prices
    May 24, 2017
    Here’s How The Body Deals With Pain – And How You Can Treat Yours
    December 31, 2018
    Latest News
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
    Top HIPAA-Compliant Messaging Apps for Healthcare Teams
    June 25, 2025
    When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
    June 20, 2025
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Medicare Advantage Premiums
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > Medicare Advantage Premiums
BusinessHealth Reform

Medicare Advantage Premiums

JasonShafrin
JasonShafrin
Share
3 Min Read
SHARE

In 2010, one quarter of Medicare beneficiaries chose capitated plans through the Medicare Advantage (MA) program. According to MedPAC, “[MA] coverage must include all Medicare Part A and Part B benefits except hospice. All plans, except PFFS [private fee-for-service] plans, must also offer an option that includes the Part D drug benefit.” How do private health plans set premiums for their Medicare Advantage plans? Can they charge any price they wish or are they regulated by the government? How will Health Reform affect MA plans? Today, the Healthcare Economist provides the answers.

Contents
Medicare Advantage TodayPost Health Reform

Medicare Advantage Today

In fact, the answer is that although Medicare Advantage plans can charge any price they wish, the amount the beneficiary pays is somewhat regulated. In each county, the Centers for Medicare and Medicaid Services (CMS) sets a benchmark premium based on are based on the county-level payment rates used to pay MA plans before 2006. If a plan’s sets its bid (i.e., premium) above the CMS benchmark, then the plan receives the base rate and the enrollees have to pay the difference between the bid and the benchmark in their annual premium. If the bid is below the benchmark, then the plan’s base rate is it’s standard bid and gets a rebate. The rebate is 75% of the difference between the plan’s actual bid and its case mix-adjusted benchmark. The plan must then return the rebate to its enrollees in the form of supplemental benefits, reduced cost sharing, or lower premiums. Medicare uses beneficiary age, sex, Medicaid eligibility and prior health conditions to create a hierarchical condition category (HCC) score which is used to risk adjust base rate payments according to beneficiary case mix.

Post Health Reform

After Health Reform, however, these rules are changing. Benchmarks will be affected by MA quality. Here’s the breakdown:

  • First Quartile: 95%
  • Second Quartile: 100%
  • Third Quartile: 107.5%
  • Fourth Quartile: 115%

This makes sense since high cost MA plans may also be high quality ones. High quality plans will also get additional bonuses.

More Read

Reducing Healthcare Costs Through Company Wellness Plans
Internet Marketing and Healthcare’s Digital Decision Makers
Insurance For Medical Professionals: What You Need to Know
AskBlue Tries to Explain Health Insurance and Obamacare
Pay for Performance Attacks Medical Quality: Lincoln Lucks Out
  • 2012: Bonus equals 1.5% of local FFS costs
  • 2013: Bonus equals 3% of local FFS costs
  • 2014: Bonus equals 5% of local FFS costs

MA plans will also receive bonuses based on quality.

  • 4.5+ stars: 70% of difference between bid and benchmark
  • 3.5 -4.4 stars: 65% of difference between bid and benchmark
  • <3.5 stars: 50%of difference between bid and benchmark

To judge the quality of care, utilization patterns, and also improve improve risk-adjustment, MA plans will begin submitting encounter (i.e. utilization) data in January 2012.

TAGGED:health care reformMedicare
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

9 Lifestyle Tweaks That Can Add Years to Your Life
9 Healthcare Lifestyle Tweaks That can Add Years to Your Life
lifestyle
July 11, 2025
car accident lawsuit
Let Your Lawyer Handle the Work Before You Pay Medical Costs
Policy & Law
July 6, 2025
women dental care
What Is a Smile Makeover and How Much Does It Cost?
Dental health
June 30, 2025
HIPAA-Compliant Messaging Apps
Top HIPAA-Compliant Messaging Apps for Healthcare Teams
Global Healthcare Policy & Law Technology
June 25, 2025

You Might also Like

online appointments could be either permanent or a temporary trend
BusinessHospital AdministrationNews

Are Online Doctor’s Appointments a Trend or New Reality?

December 23, 2021
healthcare jobs happy team
BusinessNews

Healthcare Jobs – Fastest Growing Job Sector in Next Decade

February 11, 2012
Image
Hospital Administration

Do Readmission Rates Really Indicate Hospital Quality?

June 16, 2013
BusinessNews

Is Vaping Healthier Than Smoking? The Facts

June 26, 2017
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?