Medicare beneficiaries may enroll in the traditional Medicare fee-for-service program or in a private Medicare Advantage plan. As of September 2013, 29% of Medicare beneficiaries were enrolled in a Medicare Advantage plan. Such plans receive federal funding to provide Medicare-covered benefits to enrollees. The Affordable Care Act reduced payments to Medicare Advantage plans to provide greater parity in payments between traditional Medicare and Medicare Advantage.
The report finds that in 2014, as in recent years, virtually all Medicare beneficiaries will have access to a Medicare Advantage plan. It projects that beneficiaries, on average, will be able to choose from 18 plans in 2014, down from 20 in 2013. The report also notes that:
Almost all [beneficiaries] will be able to stay in a similar type plan, often with the same company. Beneficiaries will continue to have access to plans with relatively low premiums. Beneficiaries who remain in the same Medicare Advantage plan in 2013 and 2014 are likely to see modest increases in premiums, on average, but could avoid higher premiums by changing plans[.]
All Medicare Advantage plans must include an annual limit on out-of-pocket costs. The report finds that the average will increase from $4,333 in 2013 to $4,797 in 2014; 41% of plans will have out-of-pocket limits of $5,000 or more in 2014.
