Enrollment jumps, easing fears healthcare would kill private plans

Enrollment into Medicare Advantage plans is projected to grow by 10 percent next year even as premiums drop 4 percent, the government said Thursday.

The new projections offer the clearest evidence yet that concerns that the healthcare reform law would destroy private Medicare plans might have been premature. The Congressional Budget Office projected two years ago that the law's $200 billion in cuts to the program would cause enrollment to drop from more than 11 million to 7.5 million by 2018.

"Many people raised fears that under the Affordable Care Act, beneficiaries would see their Medicare Advantage options shrink and their premiums rise," Health and Human Services Secretary Kathleen Sebelius told reporters on a conference call. "Instead, we have seen just the opposite."

"Medicare Advantage plans remain committed to the program and are doing everything they can to preserve benefits and keep coverage as affordable as possible for beneficiaries," America's Health Insurance Plans spokesman Robert Zirkelbach said in a statement. "However, as these cuts take effect in the coming years, Medicare Advantage beneficiaries will face higher out-of-pocket costs, reduced benefits and fewer healthcare choices."

Republicans say health officials were able to stave off cuts until after the 2012 election in part thanks to a multi-billion dollar bonus program that was created after the law was passed.

Premiums for Medicare prescription drug plans are expected to stay flat, Sebelius said, and only about 1 percent of enrollees will have to sign up for new MA or drug plans because their current plans are pulling out.

The announcement comes shortly before the start of enrollment season. It starts earlier this year — Oct. 15 — and will last seven weeks, longer than in the past.

This story was updated at 1:27 p.m.