Proposals Related to: Benchmarks for plan payments
Medicare pays MA plans based on a system that compares plans’ bids against target amounts called benchmarks. A bid represents the plan’s expected cost of providing Part A and Part B services, including administrative costs and profit, to a beneficiary of average health who lives in a specific service area (usually a county). A benchmark is the maximum amount that Medicare will pay for an MA enrollee and is based on projected levels of spending in original Medicare for a beneficiary of average health in the same service area. Most plans are able to bid below their benchmark, and plans use a portion of that difference (called an MA rebate) to lower enrollee cost sharing and premiums, provide additional benefits not covered under original Medicare, or provide more generous Part D drug benefits. The share of rebate dollars that plans may retain to use for supplemental benefits depends on their quality rating in CMS’s star rating system.
Before comparing bids to benchmarks, CMS adjusts benchmarks in several ways. First, counties are ranked into quartiles by their projected levels of original Medicare spending. To encourage plans to operate in all parts of the country, lower-spending counties have their benchmarks adjusted upward. To encourage plans to share efficiencies with the Medicare program, the highest-spending counties have their benchmarks adjusted downward. Second, plans that receive higher star ratings are awarded bonus amounts to their benchmarks. In certain counties, those quality bonus amounts are doubled for plans with high rankings. Under current law, plans’ benchmarks may not be higher than benchmarks that were set under rules established before the Affordable Care Act.
Proposals in this category would make changes to the current system for setting administrative benchmarks.
NOTE: Entries with grey backgrounds are Georgetown estimates. Entries with white backgrounds are either descriptive information or analysis made by or for the proposal authors.
| Proposal | Effects on beneficiaries | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Short description | Category | Author | Federal savings (-$) or costs (+$) | Access to plans | Enrollee costs | Supplemental benefits | Part B premiums | Other affected stakeholders | |
Key:
- Federal savings or costs. When available, we provide original estimates from source materials by the proposal author(s) or from the Congressional Budget Office. Authors prepared estimates for some proposals at a time when plan enrollment and payments differ from today, and thus estimates of savings or costs should be interpreted cautiously. When no author’s estimate was available, Georgetown provided an estimate, as indicated by grey highlighting. Click Details for more information about savings or costs for a specific proposal.
Estimates in source materials prepared by the author(s) cover different numbers of years and windows of time. To give website users a consistent sense of magnitude, we categorized proposals by whether its estimate was approximately less than $10 billion over 5 years or greater than or equal to that amount. Thus, in this column,- +$ indicates anticipated costs to the federal government of less than $10 billion over 5 years.
- +$$ indicates anticipated costs of $10 billion or more over 5 years.
- –$ indicates anticipated savings to the federal government of less than $10 billion over 5 years.
- –$$ indicates anticipated savings of $10 billion or more over 5 years.
- We list a question mark for proposals in which the author(s) would need to specify more detail to estimate federal spending.
- Effects on beneficiaries. When available, the estimate was provided by the proposal author(s) within the cited source materials. When no author’s estimate was available, Georgetown provided an estimate, as indicated by grey highlighting. In the four columns under this header,
- Up arrows indicate anticipated greater access to plans, higher costs (premiums and cost sharing) for plan enrollees, more availability of extra benefits, or higher Part B premiums applicable to all beneficiaries.
- Down arrows indicate the reverse effects.
- Combined up and down arrows indicate mixed effects, such as up for some categories of beneficiaries and down for others.
- Categories may also be reported as “minimal or no effect” or “not applicable.”
- We list a question mark for proposals in which the author(s) would need to specify more detail to estimate effects on beneficiaries.
- Click Details for more information about beneficiary effects for a specific proposal.
- Other affected stakeholders. This column reports any stakeholders other than Medicare beneficiaries likely to be affected significantly by the proposal. Click Details for more information about a specific proposal.