A recent report found that monthly premiums for private Medicare Advantage plans rose by an average of 14.2 percent from 2009 to 2010.
* Private fee-for-service (PFFS) plans posted a 31.2 percent increase in premiums, driving up the average for all Medicare Advantage plans, including HMOs and preferred provider organizations.
* The reported average increase of 14.2 percent results from an assumption that seniors shopped around for the lowest price in their area. Medicare Advantage enrollees who remained with their old plan would have seen premiums go up by 22 percent, from 2009 to 2010.
In Washington, politicians are discussing large cuts in federal payments to Medicare Advantage plans. If that occurs, some sponsors might drop out of Medicare. That has happened before: from 1998 to 2002, 2.4 million Medicare beneficiaries were dropped by private HMOs that either left Medicare altogether or reduced their service areas. Already, some insurers are pulling back from their private fee for service plans.
For many seniors, Medicare Advantage remains a cost-effective way to get comprehensive medical care. Nevertheless, if you enroll in Medicare Advantage you should be ready to change your coverage if costs rise sharply or if your plan leaves Medicare.
