Senate Bill has major changes to MA

The Senates Patient Protection and Affordable Care Act contains significant changes to Medicare Advantage Plan payments. By 2015, plan payments will be determined by enrollment weighted average bids for local MA plans. Currently, payments are determined based on local benchmarks. The new system uses a competitive bidding system, and is expected to lower costs by $118 billion over ten years.

The Senate Bill differs markedly from the House Bill, which calls for MA payments to be equal to the average per capita costs under Fee For Service. The House Bill is expected to lower costs by $170 billion over ten years.

Regardless of which approach is in the final bill, payments to MA plans are going to be significantly reduced over a ten year period. Plans should start preparing now to determine how these changes might affect them, and how it might impact the benefits they will offer going forward.