Milliman, the actuarial consulting firm, has published a new report on the impact of the government’s cuts to Medicare Advantage. The report was sponsored by the Better Medicare Alliance, which announced that “seniors now face soaring maximum annual out-of-pocket costs” due to the cuts.
And yet, the purported cuts have not really bitten health insurers. Medicare Advantage enrollment is at an all-time high. NCPA has favored Medicare Advantage over the traditional Medicare Parts A and B, but we have noted that insurers seem to capture more of the value than beneficiaries do.
The Milliman report explains this quite well. Looking only at Medicare’s physician and hospital benefits (and ignoring the Part D drug benefit), Milliman reports that Medicare Advantage plans reduced the average beneficiary’s share of Medicare’s costs (coinsurance, deductibles, and Part B premium) by $67.65 in September 2012 (or $811.80 annually) and gave him $11.65 worth of non-Medicare benefits ($139.80 annually). The latter include enticements such as fitness-club memberships.