The number of health plans that offer Medicare Advantage plans has grown significantly over the past decade. While both Medicare and private insurance often share a common goal, with both designed to make health care affordable and accessible to seniors, the two different programs sometimes come into conflict. Since private insurance companies cannot use the risk pools available through Medicare’s program, many enrollees have faced rejection by their private insurers when they request coverage for their Medicare Advantage plans.
However, according to a recent study, the number of private insurers declining to cover these plans is expected to decline as more plan enrollees take advantage of the opportunity offered by the new, reduced rates. The expected decline in attrition could result in the potential creation of hundreds of thousands of new Medicare Advantage plans for individuals, providers, and health plans in the years ahead. And that could mean many opportunities for consumers.
Policyholders in these plans are afforded a number of choices. First, the plans provide quality care without the premiums, deductibles, co-payments, and other out-of-pocket expenses that are typical of traditional Medicare. The plans also are responsible for covering quality patient-centered information technology services in order to prevent computer problems that could affect medical records. These services are not available with traditional Medicare.
However, these plans are not free from the potential conflicts that may arise from the Medicare Advantage plans, as they compete for business. Plans must compete against each other for enrollees, which means each plan must maintain a competitive price point to stay in business. And the best way to do that is to maintain the lowest premium rate possible.
Medicare Advantage plans must compete for enrollee dollars using a reasonable bid price that is comparable to the original Medicare Parts A and B benefits. In addition, the price of the policyholder’s services is based on the percentage of his or her income that goes towards the premium.
This means the insurer must ensure that all members receive the same amount of benefits with the same percentage of his or her income that will go towards the premium. While this can seem easy, it’s not always the case.
Plan members in traditional Medicare may not realize how much money goes towards their premium. Of course, the plan is still required to provide benefits, but the premium amount is adjusted for each individual member’s income level. The end result is that you may pay less than others for the same service.
Some of the complications are inherent in the pricing process. Insurers must also assume that a particular member may qualify for a higher deductible than other members with similar health histories. And many seniors are already paying too much for their Medicare benefits, so the extra monthly premium expense for the same level of care is likely to be offset in their spending on healthcare, helping to lower the plan premium amount.
Whether they know it or not, many members are unknowingly underpaying for their Medicare benefit by paying the plan premium rather than the actual Medicare Part A and B benefits. While some plans do require their members to pay a specific portion of the plan premium, many are designed for people who want the highest amount of coverage for the lowest premium costs.
Other plans allow their enrollees to qualify for a percentage of Part B benefits at a lower premium. In other words, they are almost like a hybrid Medicare Plan or Medigap plan.
With this scenario, many seniors are paying more for their coverage than is necessary. They pay higher premiums for benefits that are often redundant or simply not required by their age and health status.
With a new administration coming into office and the current administration’s plans to repeal the ACA, these plans could be facing some opposition. However, some business owners and seniors can work together to combat the potential threats to the Medicare Advantage plans 2020 on https://www.medicareadvantageplans2020.org