News Briefs: BMA-Sponsored Paper Predicts $33 PMPM Cut to Supplemental Benefits
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Mar 07, 2024
A recent report commissioned by the Better Medicare Alliance (BMA) estimated that Medicare Advantage per-member per-month (PMPM) payments could drop by 1.0% if CMS finalizes proposals contained in the 2025 Advance Notice. It also estimated that the PMPM value of supplemental benefits, or reductions to premiums and cost sharing, would decline by an average of $33 or more. In its preliminary rate notice released in January, CMS projected that MA plans could see an average revenue increase of 3.70%, which included an estimated a -2.45% revenue decline due to a combination of risk model changes that are being phased in and fee-for-service Medicare normalization, an effective FFS growth rate of 2.44%, and an average risk score trend of 3.86%. The report, prepared by Berkeley Research Group (BRG), projected that MA medical cost inflation will rise by 4% to 6% in 2025 and that CMS’s estimated pay increase will not adequately cover increased medical expenses. Citing a National Association of Insurance Commissioners analysis, BRG pointed out that PMPM medical costs in MA increased by an estimated 7.3% for the first nine months of 2023, while recent insurer earnings reports suggest medical costs will continue to grow in 2024. Read more
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