MA Plans pay for Medical Services
In 2022, Medicare Advantage plans paid out an estimated average of $2,350 per enrollee above their estimated costs for providing Medicare-covered services. This amount is referred due diligence to as a rebate.
The federal governments have helped to boost Medicare growth and overall program expenditures. CBO estimates that, between 2021 and 2032 the net Medicare expenditures (i.e., those after subtracting premiums and other offsetting receipts) will increase as a share of both the federal budget and the national economy.
The average MA plan rebate has risen substantially in recent years. This trend is due in large part to the fact that most MA plans are located in areas that have high benchmarks. For every dollar difference in benchmarks, MA plans (including profits) cost 32 cents more and rebates cost 52 cents more.
Costs for MA plans vary based on the region due to the fact that the Medicare Advantage program uses different benchmarks and reimbursement methodologies for each of the service areas. It is not unusual for the same MA plan to compete in several regions, using different benchmarks and payment methodologies.
The MA program also covers additional benefits not covered by Original Medicare, such as vision, hearing and dental services. These costs may vary based on plan, as well as monthly premiums and out-of pocket maximums. These costs may also be affected by network restrictions. In VBID MA plans, they are able to innovate to meet the needs of individuals by addressing the social determinants and enhancing care coordination.