Doc shortage slows Medicare Advantage growth














As of December 2009, there were 10.9 million individuals enrolled in Medicare Advantage (MA) plans. That’s more than a million member increase from 2008. And although a million member bump and an annual growth rate of 10.4 percent are respectable, according to A.M. Best, the credit rating organization, it’s lower than the growth rate of the prior two years, when the rate was in the high teens.

Medicare Advantage did not grow as fast from 2008 to 2009 as it had in previous years because some plans stopped offering a private fee-for-service (PFFS) product, according to the company’s publication, 2010 Special Report: U.S. Health — Review & Preview.

A PFFS plan is an MA health plan, offered by a state-licensed, risk-bearing entity that has a yearly contract with the Centers for Medicare & Medicaid Services to provide beneficiaries with all of their Medicare benefits plus any additional benefits that the company decides to provide.

Because the Medicare Improvements for Patients and Providers Act of 2009 requires companies that offer the PFFS product to build a provider network for their members (effective Jan. 1, 2011) — and in view of the widely known shortage of physicians — plans have been jettisoning the PFFS product, with exits taking effect Jan. 1, 2010 and 2011.

Dropping the product has caused some individuals to switch from a PFFS product to another type of plan, either a preferred provider organization or a health maintenance organization, according to the report.

As MA plans discard PFFS products, membership hits a snag

Medicare enrollment (in thousands)

Source: A.M. Best. 2010 Special Report: U.S. Health — Review & Preview. Feb. 8, 2010.

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