Ritter Insurance Marketing, Craig Ritter

CMS Increases 2018 Payments to Insurers

In a press release issued April 3, the Centers for Medicare & Medicaid Services (CMS) announced an average 0.45% payment increase for 2018 Medicare Advantage and Part D plan insurers.

After factoring in plan coding for member diagnoses, the average increase will be about 2.95 percent.

Plan YearAvg. Rate Increase from Previous YearExpected Increase After Coding
View Older Rate Notices
20170.85%3.05%
20180.45%2.95%

The 2018 rate hike is higher than the 0.25 percent increase proposed in February.

CMS also made changes to a few other policies designed to increase flexibility and innovation in the health care industry. Read more in the official rate announcement.

County Variations

Company President Craig Ritter notes that the funding increase is not uniform across counties, so the impact can vary. “Counties right next to each other could get – and likely will get – different increases,” he explains.

Rate increases are also distributed differently across plans based on their star ratings, including within an individual county.

“Looking at plans within a single county, some will fare better than others. This is particularly true in cases where plans experienced a change in star rating from 2016 to 2017, crossing the 4-star threshold.”

We’ve broken down the county data on a more granular level and made it available on the Agent Survival Guide Forum.

About the Payments

CMS makes monthly taxpayer-funded payments to insurers based on their member pool. Among other factors, the rates are influenced by the amount of services used and the relative risk of insuring plan members.

Risk scores are determined by how sick the beneficiary pool is. Insurers with riskier populations receive higher payments because members are expected to utilize more services.

Posted by filed under CMS, Medicare Advantage, News, Part D .


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