MA Plans pay for Health Care Services
In 2022, Medicare Advantage plans paid an estimated average of $2350 per enrollee over the estimated cost of providing Medicare-covered services. This is referred to as a rebate.
The federal government have helped drive growth in Medicare and overall program expenditures. CBO projects that between 2021-2032, net Medicare expenses (i.e. the ones after subtracting costs of the program and offsets) will increase in proportion to the federal budget and virtual data room the nation’s GDP.
The average MA plan rebate has risen substantially in recent years. This is due in large part to the fact that the majority of MA plans are located in areas with high benchmarks. For every dollar difference in benchmarks, MA plans (including profits) cost 32 cents more, and rebates are 52 cents higher.
The Medicare Advantage program uses different benchmarks, reimbursement methods and regions of service for each. It is not uncommon to see the same MA plan to be a part of several regions, using different benchmarks and payment strategies.
The MA program also pays for additional benefits not covered by Original Medicare, such as hearing, vision and dental services. These costs may vary based on plan, as can monthly plan premiums, as well as out-of-pocket maximums. These costs may be impacted by network restrictions. In VBID MA plans innovate to meet the needs of individuals by addressing social determinants and enhancing the coordination of care.