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Why Tavenner's new post, Aetna-Humana merger show Medicare Advantage's strength

Program has not taken predicted hit from Affordable Care Act

Both the Aetna-Humana merger deal and the news that Marilyn Tavenner will take the helm of America's Health Insurance Plans (AHIP) underscore just how important Medicare Advantage (MA) has become to the country's private health insurers, according to Forbes.

One of the main factors that made Humana ripe for acquisition was its booming Medicare business, and the program likely will experience even more growth as scores of baby boomers hit retirement age, FierceHealthPayer has reported. Indeed, total enrollment in MA plans is expected to double by the end of the decade, Forbes notes, citing Advisory Board Company data.

Then there's AHIP's new CEO Tavenner, who previously served as administrator of the Centers for Medicare & Medicaid Services (CMS) and told the New York Times that high among her top priorities was to protect the MA program. Her new role at the head of AHIP shows that private insurers value the expertise of an MA expert and advocate, the article argues.

And both events signal how much MA has proved predictions wrong that the Affordable Care Act would deal the program a serious blow. The ACA did in fact cut CMS payments to MA health plans in an attempt to control spending, but not as much as anticipated. Thus, instead of the program fading away, enrollment has grown by 42 percent since 2010.

Seniors are drawn to MA plans because they offer the familiarity of accessing insurance through private companies and relatively flat premiums, the Kaiser Family Foundation's Tricia Neumann told Forbes.

"So for the moment, it's a rapidly growing market, and none of the major payers want to be left out," the Advisory Board's Hamza Hasan added.

The program has faced recent controversy, however, as a government audit revealed that some insurance plans overbilled MA by millions of dollars.

To learn more:
- read the article

Related Articles:
Former CMS Administrator Marilyn Tavenner named CEO of AHIP
Booming Medicare business could make Humana an acquisition target
Government audits reveal millions in Medicare Advantage overpayments
Challenges, benefits abound with Aetna-Humana deal