Making Sense of Changes to Medicare Advantage

Lately, there have been so many headlines related to CMS changes for 2024, each one significant. Discussions focus on policy changes and notable financial increases or decreases that impact members, providers, and payers. Yet, what is the impact when you put all these changes together? It seems there should be a discussion about what this all means collectively.

The natural migration from traditional Medicare to Medicare Advantage continues, with 50% of enrollees in MA as of January 2023, and this is projected to reach 61% by 2032.

However, CMS changes to risk adjustment and other reimbursement modifications essentially result in a reduction in payments to payers and provider organizations over the next few years.

And 2024 Star ratings were just released, with the number of 4 Star plans
declining from 68% in 2022 to only 42% for 2024. Only around 7% of MA beneficiaries will be enrolled in a 5 Star plan, compared to 22% last
year.

While at the same time, enrollees will see an average increase in their member premium of approximately 6%.

So, what is the impact?

Providers and health systems are starting to terminate their participation in Medicare Advantage across the country due to operating losses on managing the product under today’s terms. Frequent changes implemented by CMS make it challenging to invest in value added benefits…what will happen when premiums rise? Will members still enroll in MA plans? And will more providers and health systems terminate as the dollars are squeezed further?

Many payers and providers have been strong advocates for increasing MA enrollment over the years. With the continued evolution, focus, and
refinement of value-based care models, this is a good solution. The dialogue should be how to transition in a way that protects providers and members through the waves of ratings and rates to ensure that patient care and outcomes remain everyone’s laser focused goal. Who should be at the table? Thoughts?