Photo by Daniel Laflor

But under the 2008 law, starting in 2011 private fee-for-service plans will have to establish definite contracts with providers except in rural areas where only one MA plan, or none, exists. The law also tightens marketing regulations for these plans.

Many of these plans, too, are saying they’re pulling out of Medicare because of the 2010 payment cuts. But because a very large number of MA plans are still available, “our judgment is that private fee-for-service plans aren’t jumping out of this business because of the payment cut,” says Timothy Hill, deputy director of the Center for Drug and Health Plan Choice, which oversees the MA program at CMS. “They’re jumping out because of the provisions that require them to have networks.”

Hill emphasizes that beneficiaries will still have many choices among MA plans in 2010. The number of plans available ranges from five to more than 100 depending on the county—except for Alaska where only three out of 27 counties will still have an MA plan.

Switching to another plan

AARP and other consumer groups urge beneficiaries to watch for letters from their plan titled “Annual Notice of Change,” which must specify all changes in costs and benefits for the next year. Beneficiaries also can compare plans in detail on the Medicare website, and can switch to another plan, or to traditional Medicare, during open enrollment, which runs from Nov. 15 to Dec. 31.

Two people who have already made up their minds to switch plans are Nancy Henretty and her husband. In 2009, they were happy with their high-end PPO plan from MVP Health Care, a nonprofit insurer that has three MA plans with 750,000 enrollees in New York, Vermont and New Hampshire. But a premium increase to $165 a month for each of them is unaffordable, says Henretty, who although retired is an on-call public school tutor. They may switch to a less generous MVP plan that will cost $92 a month each, a premium that itself is up from $64 in 2009.

That plan, she notes, gives no coverage for dental care as it did last year, despite the premium hike. But free health club memberships, a common extra benefit in many MA plans, are still part of the deal. “I don’t need to go have a massage or play golf or go to Silver Sneakers,” she says. “I’d prefer coverage to let me have a cavity filled.”

Henretty remains annoyed about the letter from MVP. If the company had explained it needed to raise premiums “because of cuts that had already occurred, and nothing to do with reform legislation, I’d have understood,” she says. “It would have been more honest.”

The insurer, which announced a loss of $28 million in 2008 in a company press release last April, stands by the wording of its letter. “MVP Health Care believes that the statement in our recent letter to plan members referencing health care reform and the reduction in Medicare Advantage reimbursement is an accurate statement,” company spokesman Gary Hughes responded to AARP Bulletin Today in an e-mail, because “that reduction is part of a larger legislative process intended to reduce Medicare reimbursement.”

Patricia Barry is a senior editor of the AARP Bulletin who writes about Medicare and health policy.

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