This is the second part of a two-part First Look at public Part C Medicare health plans (most of which are available under the name Medicare Advantage). The first part, here, looked at the history of Part C Medicare health plans.
As for what is likely to happen in 2014, although the Medicare-bureaucracy's rules have been issued to the Part C administrators (see NOTE) for 2014, there are no new rules that greatly impact the senior EXCEPT one pretty important change. The process for calculating the 2014 "capitation rate" (in the history post, I the use term "per head") was changed from previous years. In Barnstable County, the capitation rate is about 1% higher than in 2013. If the Medicare bureaucracy had used the old process, the calculation probably would have meant a lower capitation rate.
The fact that the capitation rate that the Part C administrator gets from the Medicare bureaucracy is slightly higher means that -- all other things being equal -- premiums should be about the same per month or even a few dollars less in 2014. But all other things are never equal.
- Budget cuts baked into the Patient Protection and Affordable Care Act (better known as Obamacare) will likely raise premiums a little.
- A special bonus program in process this year related to your Part C plan's star rating -- and which extends into 2014 -- will likely lower premiums a little.
- Other federal-government budget cuts will raise premiums a little.
- The continued increasing popularity of Part C Medicare health plans (up from 2% of those eligible when the program started to near 30% this year) might lower premiums a little (more people in the pool)
- County by county changes may raise or lower premiums or eliminate your Part C plan altogether (as happened in Worcester Country for 5000 Tufts customers this year) no matter what happens nationally.
Update July 8: A major change in Part C Medicare health plans in 2014 will be the use of new medical loss ratios (MLRs) that dictate how much an insurer can spend on medical costs as opposed to other costs (e.g., no more than 15% of premiums collected on marketing, customer service, quality control, and so forth). These new MLRs may serve to lower premiums a bit but in general Massachusetts already has excellent medical loss ratios so the effect for us here in Massachusetts will probably be minimal.
(NOTE: In most cases, the insurers that offer public Part C Medicare health plans are the same insurers that offer Part D standalone drug plans and private Medigap supplemental insurance (e.g., Blue Cross in Massachusetts sells a public Part C plan and private Medex Bronze). In addition, some insurers administer three or four parts of Medicare and even other insurance policies unrelated to Medicare. For example, the insurance company that just took over the administration of Original Medicare Parts A and B in New England also administers VA insurance and programs for the military. Similarly, one of the leading Original Medicare Part A and B insurers in the Midwest -- Wisconsin Physicians Service -- sells group and individual insurance to non-seniors as well as Medigap plans and Part D plans. )
