MA Plans pay for Health Care Services
In 2022, Medicare Advantage plans paid out an estimated average of $2,350 for each enrollee over their estimates for the cost of providing Medicare-covered services. This amount is known as a rebate.
These payments from the federal government have led to growth in Medicare Advantage as well as overall program spending. CBO estimates that, between 2021 and the year 2032, net Medicare expenses (i.e. those after subtracting the cost of premiums and other offsets) will increase in proportion to the federal budget and the nation’s GDP.
In recent times, the average rate of rebate for MA plans has risen dramatically. This is due to the fact that many MA plans are located in areas with high benchmarks. For every dollar difference in benchmarks, MA plan costs (including profits) and rebates are 52 cents and 32 cents higher, respectively.
The Medicare Advantage program uses different benchmarks, reimbursement methods and service areas for each region. It is not uncommon for the same MA plan to be a part of multiple regions, and with different benchmarks and payment methodologies.
The MA program also covers additional benefits that are 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 affected by network restrictions. In VBID MA plans, we are innovating to meet the needs of individuals by addressing the social determinants and improving the coordination of care.
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