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Favorable Reg Provisions Increase MA Enrollment

Over the past several years, changes in laws and regulations have encouraged greater plan participation and enrollment growth in the Medicare Advantage (MA) private fee-for-service (PFFS) market, according to “The Emerging Role of Group Medicare Private Fee-for-Service Plans” from the Henry J. Kaiser Family Foundation.

Legislation such as the Medicare+ Choice program, created by the 1997 Balanced Budget Act, expanded private plan options for employers and individuals to include PPOs, PFFS plans, and medical savings accounts. In 2003, the Medicare Modernization Act authorized MA, which replaced the M+C. Other regulatory waivers issued by the Centers for Medicare and Medicaid Services made PFFS plans more attractive to employers, unions, and plan sponsors by reducing administrative and operational barriers. And in 2009, group HMOs and PPOs can extend coverage to retirees living in areas where the plans don’t have provider networks. They can function like non-network PFFS plans, which do not restrict enrollee choice among providers who agree to accept the plan’s payment terms, are licensed, and have a Medicare billing number. The report details the emerging role of group Medicare PFFS plans:

  • Enrollment in group PFFS plans has expanded from almost 33,000 in 2006 to over 600,000 in 2008. It constitutes 36 percent of the total MA enrollment.
  • In 2006, nine health plan organizations offered group PFFS plans. In 2008, there were 41. Aetna and Blue Cross Blue Shield of Michigan have the most enrollees in group PFFS plans, together capturing over half of the market.

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