3 challenges facing Medicare Advantage insurers


Although insurers scored big when the Centers for Medicare & Medicaid Services chose not to reduce Medicare Advantage payment rates, they still face several challenges in the market, reported Healthcare Finance News.

Here are three such obstacles insurers selling Medicare Advantage plans must address.

1. Decreasing Medicare Advantage margins

Despite the continued growth of Medicare Advantage plans, which have consistently found innovative ways to offer benefits and value amid payment cuts, some industry analysts predict insurers' margins will soon shrink. Many insurers, including Aetna and Humana, disagreed with calculations CMS used to determine its 2015 payment rates. They said the final rates will still result in lower reimbursements.

2. Heightened attention from lawmakers

Another issue pressuring Medicare Advantage plans is heightened attention from lawmakers, particularly surrounding narrow networks. After UnitedHealth announced it would cut about 19 percent of doctors from its Medicare Advantage network in Connecticut, network size garnered national attention and ended up in the court system as hospitals fought back against the downsizing of providers.

Going forward, CMS requires Medicare Advantage insurers notify regional offices at least 90 days in advance if they're dropping a significant number of providers. They also must allow members the opportunity to enroll in a new plan, even if it's outside of the open enrollment period, if one of their providers is removed.

3. Rejection of low-rated plans

Beginning next year, CMS won't allow any Medicare Advantage insurers to renew plans if they have received three or fewer stars on the rating system for three consecutive years. Eight Medicare Advantage plans have had less than three stars for three straight years and several more have had less than three stars for at least two years. "Dozens of plans are now dead men walking," John Gorman, a healthcare consultant and former federal managed care regulator, wrote in a rate analysis, according to Healthcare Finance News.

To learn more:
- read the Healthcare Finance News article

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