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Best's Briefing: Medicare Advantage Cuts to Drive Adjustments; No Major Exits Expected
[February 28, 2014]

Best's Briefing: Medicare Advantage Cuts to Drive Adjustments; No Major Exits Expected

OLDWICK, N.J. --(Business Wire)--

The release of the proposed rate reduction to insurers providing Medicare Advantage coverage seems to be within an acceptable range for most insurers to maintain their offerings for 2015. Since 2010 with the passage of The Patient Protection and Affordable Care Act (PPACA), health insurers have been preparing and adjusting for the gradual progression of Medicare Advantage reimbursement levels toward parity with traditional fee-for-service Medicare.

There are a lot of moving parts to the overall profitability of Medicare Advantage, and margins for this line of business continually are being challenged. Reimbursement levels and bids for Medicare Advantage change annually, so each year insurers have to adjst their business strategies and operations for this line of business. Currently, two changes carriers are adjusting to are the new requirements of the Star bonus program, which has raised the bar to four stars for being able to achieve quality bonus payments, as well as the industry tax on all premiums as a result of a provision of PPACA.

For the full, complimentary copy of this briefing, please visit

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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