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The Value of Medicare Advantage
Karen IgnagniPresident and CEO
America’s Health Insurance Plans
July 16, 2007
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Choices Before Congress
Maintain Choices in All Markets
versus
Reducing or Eliminating Choices
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How to Evaluate Choices
Assess History
Assess Value
Consider Constituent Impact
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Medicare Advantage: An Historical Look*
Medicare Advantage Enrollment History and Major Payment Changes
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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Enro
llmen
t in
mill
ions
BBA payment methodology and rural floors-PFFS option begins
(-$97B) /10 years
BIPA Urban floors and higher rural floor payments
$32.5B/10 years
MMA $4.3B/10 years for MA Improvements $10 B/10 years for Stabilization Fund
(Now $ 3.5B per TRHCA)
Risk plansMedicare +Choice
Medicare Advantage
Part D
*Chart based upon CMS Medicare Advantage Fact Sheet (3/07).
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Bipartisan Congressional Efforts to Extend Access to Choices BBA 1997 – Congress established rural “floors” (rates intentionally set above FFS)
BIPA 2001 – Congress established MSA floor
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Congressional Intent Achieved
MA Plans in 2003 MA Plans in 2006
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Medicare Advantage Payment-2007 Floor Counties
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Congressional Intent Achieved --Access to benefits and savings
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The overwhelming majority of seniors enrolled in Medicare Advantage plans are satisfied with their
coverage, and satisfaction is up since 2003.
90% 84%
7% 9%
2007 2003
Satisfied
Dissatisfied
53% Very Satisfied37% Smwht Satisfied
53% Very Satisfied37% Smwht Satisfied
49% Very Satisfied35% Smwht Satisfied
49% Very Satisfied35% Smwht Satisfied
Question: How satisfied are you with each of the following aspects of your Medicare coverage: Your Medicare coverage overall?
Question: How satisfied are you with each of the following aspects of your Medicare coverage: Your Medicare coverage overall?
Source: Ayres, McHenry & Associates (March 2007)
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Serving Vulnerable Populations
MA is important choice for low-income and low-income minority
beneficiaries
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One-third of all seniors, and three-fifths of low-income seniors, would skip some health care treatments if they no
longer have access to a Medicare Advantage plan.
42%
26%
40%
52%57%
35%
62%
41%
29%23%23%
13%19% 19% 20%
All <$20K $20K-$30K $30K-$50K $50K+
Pay/Continue treatments Not pay/Skip treatments Don't know
Question: If Congress makes cuts to the Medicare Advantage program and you had to use traditional Medicare coverage, would you pay higher out-of-pocket costs so you could
continue to receive the same health care treatments you receive now, or would you not pay higher out-of-pocket costs and skip some of the health care treatments you receive now?
Question: If Congress makes cuts to the Medicare Advantage program and you had to use traditional Medicare coverage, would you pay higher out-of-pocket costs so you could
continue to receive the same health care treatments you receive now, or would you not pay higher out-of-pocket costs and skip some of the health care treatments you receive now?
Source: Ayres, McHenry & Associates (March 2007)
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MA Extra Benefits and Services -- Results
MA Enrollees Are More Likely to Receive Preventive Services Than FFS Beneficiaries w/o Supplemental
Coverage
73%
65%60%
70% 72%
55%52%
46%
58% 58%
0%
10%
20%
30%
40%
50%
60%
70%
80%
PnemoccocalImmunization
InfluenzaImmunization
Mammography * ColorectalScreening
ProstrateScreening
MA Enrollees FFS w/o Supplemental Coverage
Source: Based on 2005 Medicare Current Beneficiary Survey
* For females under 75
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MA and Medicare’s Financial Outlook: Long Term CostsWhat the Trustee’s
Report Says Data
MA Contribution
Factors adding to growth in expenditures:
Continued growth in the volume and intensity of services per beneficiary
–GAO found nearly 60% growth in spending on physician services 2000-2005 –NEJM reports beneficiaries in FFS see multiple doctors.
MA can provide medical home.
The impact of recent legislative changes including Part D
Part D costs lower by $113 B/10-year frame and $96 B result of competition and lower bids
MA reduces Part D expenditures
Demographics-aging of population
-NEJM reports uninsured age-ins have more chronic conditions.
MA plans manage these diseases.
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Three-fourths of doctors think cuts to Medicare Advantage will harm seniors.
74%
16%11%
Negative effect No effect Don't know
Question: If Congress makes cuts to the Medicare Advantage program, do you think that will have a negative effect on seniors enrolled in a Medicare Advantage plan, or do you think that
will have no real effect on seniors enrolled in a Medicare Advantage plan?
Question: If Congress makes cuts to the Medicare Advantage program, do you think that will have a negative effect on seniors enrolled in a Medicare Advantage plan, or do you think that
will have no real effect on seniors enrolled in a Medicare Advantage plan?
Source: Ayres, McHenry & Associates (March 2007)