The benchmark rates against which Medicare Advantage (MA) plans bid play a central role in determining the level of rebates that are passed through to enrollees.

In their April Health Affairs article, Michael Chernew and coauthors examine the effects of benchmark changes across markets from 2012 to 2019.

The authors estimate that a $1,000 per year decrease in benchmark rates would yield about a $60 increase in annual premiums and a $27 increase in annual deductibles, along with modest increases in other forms of cost sharing.

There have been calls to reduce MA benchmarks in response to concerns that MA plans are overpaid, yet there is resistance “because MA plans use a portion of the higher payments to support lower premiums and more generous coverage.”

This research provides important information for policy makers focused on this challenge. “Understanding what is bought with the added payments will help policy makers balance fiscal concerns with a desire to support greater benefits,” the authors conclude.

About Health Affairs

Health Affairs is the leading peer-reviewed journal at the intersection of health, health care, and policy. Published monthly by Project HOPE, the journal is available in print and online. Late-breaking content is also found through healthaffairs.org, Health Affairs Today, and Health Affairs Sunday Update.

Project HOPE is a global health and humanitarian relief organization that places power in the hands of local health care workers to save lives across the globe. Project HOPE has published Health Affairs since 1981.

Copyright © Project HOPE: The People-to-People Health Foundation, Inc.
Health Affairs, 1220 19th Street, NW, Suite 800, Washington, DC 20036, United States

Privacy Policy

To unsubscribe from this email, update your email preferences here.