Medicare Advantage premiums are expected to hit a 13-year low in 2020, and CMS Administrator Seema Verma touted the premium decline Tuesday to a ballroom full of insurance industry players. She also chastised them as frustration around surprise billing and other issues grows.
On average, monthly Medicare Advantage premiums are expected to decline 14% compared with 2019. The program has been popular among consumers and profitable for payers who contract with the government to sell the plans. About 24 million seniors, or a third of those eligible for Medicare, are expected to enroll in MA plans in 2020.
Speaking at the America's Health Insurance Plans annual conference on Medicare and Medicaid, Verma said the decrease in average premiums comes as seniors have more plans to choose from and more supplemental benefits available to them as they begin to shop for coverage during open enrollment next month.
But the news comes amid growing calls from Democrats running for president for moving toward a "Medicare for All" type system and she blamed insurers for their role in fueling the discussion.
"Consumers are frustrated and fed up. And to address the elephant in the room, they are frustrated with you," she said, pointing to surprise billing, denying care and the complexity of the system.
She warned of this moment as a canary in the coal mine.
Ten years ago, Congress voted to expand health insurance to Americans across the country. But now, "there's a growing chorus to eliminate your industry entirely," she said.
When businesses have failed to adapt and listen to their consumers, they have gone extinct, she said, warning insurers risk being on the same path as record players and video stores.
Seema said the success in MA and Trump's policies to increase supplemental benefits is a testament to "what can happen when government gets out of the way and allows private market competition to flourish."
She called on insurers to take on the commercial market in the same way.
"I ask you to seize the moment to effect real, meaningful change: reduce administrative complexity, become more transparent and help us accelerate the adoption of value-based care," she said. "Your leadership is essential."
One Trump administration official acknowledged why Americans may feel the need for a dramatic overhaul, noting life expectancy declining even as health spending is outpacing the gross national income.
"It's not surprising that as we quickly come to the presidential election season, that we're being asked to consider significant — or certainly consequential — changes to our healthcare system," Jim Parker, a senior adviser on health reform within HHS, said at the conference Monday.
Yet, others raised questions about just how enthusiastic the public is about a Medicare for All approach.
Phillip Morris, a partner at Locust Street Group, said his firm's polling shows a remarkable decline in support for the idea.
Currently, about 40% of Americans support Medicare for All, an 11% decline since late last year, and a 16% decline among Democratic voters, Morris said of his firm's public opinion poll.