Changes to Medicare Advantage Plans

Last month I received a call from a woman concerned about her father’s UHC Medicare Advantage plan. A letter came in the mail informing her father of provider cuts, including his primary physician, which would be occurring shortly. UHC suggested her father find new providers, as most of his would be dropped. Upset and confused, this woman did not know what to do, and I suggested a Medicare Supplement versus finding another Medicare Advantage plan. Unfortunately, her father had only recently left the hospital, leaving him medically unqualified for the time being. Insurance carriers need only give 30 days notice to their beneficiaries, but for many this 30 day notice is not enough.

The father would be losing 8 of his doctors in the provider cut. By January 1st, he will not be able to afford any of his current providers.

After learning about this phenomenon, I began to research Medicare Advantage cuts for 2014, my thought being UHC had a reason for giving some doctors the boot.

I was right. Due to changes in government funding to Medicare Advantage plans, the company has taken measures to streamline their network of providers for solely MA plans. UHC Medicare Supplement policyholders will not be affected by these cuts.

The “Doctor Fix” is part of a ten-year plan to strip down the spending on Medicare Advantage plans by $156 billion. For those who have MA plans, you know that funding is already tight. While premiums will only increase slightly, there will be other cuts down the road for MA plans. These include new plans concerning provider payment. There is new legislation (well, new to me and you) that will stall doctor cuts for now, but will contain a new formula. This formula will be the method of which Medicare determines payment to individual providers. Doctor’s will be judged on multiple areas that are meant to assess provider quality. Currently, doctor’s make a flat rate on seeing patients and flat rates for different services they provide.

With less funding to their Medicare Advantage plans, UHC was “forced” to reorganize their provider network, which means the 14 million UHC Medicare Advantage beneficiaries might have to find new providers. In a news article from USA Today, Susan Jaffe of Kaiser Health News writes that Medicare officials are currently reviewing UHC provider networks, which might result in another reconfiguration, hopefully for the better. Jaffe also urges that “losing a doctor does not constitute an exception” to the special enrollment period. An enrollment period available for extraneous situations only. For example, moving from your network or the insurance carrier filing for bankruptcy are situations in which you would qualify for a special enrollment period outside of open enrollment.

Unfortunately, for many Americans, Part C is the only supplemental insurance they can afford. There are also many Medicare beneficiaries who are stuck with their Advantage plans due to health reasons. I wish I could say that I see these plans turning around in the future, but it doesn’t look promising. Hopefully things will change for the better.

As for those people who can afford to switch from your current Advantage plan, now might be a good time. Of course you will have to wait until the Annual Dis-enrollment Period (January 1st to February 14th for 2014).

Medicare Supplement plans are currently not going to be impacted by this legislation or the Affordable Healthcare Act– Medigap beneficiaries will be able to keep using current providers and their coverage will not change.

The Truth About Medicare Advantage

Before you can make ANY decisions about Medicare you have to know and understand these important truths about Medicare Advantage.

Medicare Advantage is network based.

Perhaps the most important thing you need to understand about Medicare Advantage programs is that they all rely on some type of network of providers. These networks come in the form of either an HMO, PPO, or PFFS. There can be some variances of these, but these are the most common. I will break down these networks in part 3 of this series.

Advantage plans are not created equal.

Although they are structured the same; Medicare Advantage plans can vary drastically from plan to plan. This means that you must do your homework before joining one of these plans. You should start by identifying whether or not your providers are in network. The second biggest factor to consider which most people ignore is the Maximum Out-of-Pocket. Don’t get caught up in comparing little things like doctor’s copays unless the doctor’s office is your second home!

MA plans provides a Maximum Out-of-Pocket.

Continuing on from the previous point, the Maximum Out-of-Pocket is one of the biggest benefits of Medicare Advantage. If you remember on my previous article about Original Medicare; it does not give you this protection. For people that can not afford a Medicare supplement or just want to save some money, the Maximum Out-of-Pocket feature of Medicare Advantage plans offers great security.

Medicare Advantage is still a part of Medicare.

I’m including this truth because I have found that many people believe that they lose their Medicare benefits when they join an Advantage plan. The truth is that Medicare Advantage is actually called Part C of Medicare. Yes, it does override your Part A and Part B benefits, but this is actually a good thing for you because it allows you to in many cases not to have to pay large deductibles and that 20%.

Medicare Advantage is not right for everyone!

I can’t tell you that one plan fits all. Unfortunately, since every plan is different, and your needs are different than your neighbors; I can’t tell you to go join one particular plan. But I can tell you that some of the most popular plans are offered by Humana, United Healthcare, Wellcare, and Healthspring. Start by asking yourself these questions; How important is freedom of choice when it comes to your health providers? How important is cost? How healthy am I? Once you answer those questions you can easily decide whether you want to be in an Advantage plan or in Original Medicare with a Medicare Supplement.

Medicare Supplements and Medicare Advantage Plans Are Not the Same Thing

Medicare Advantage Plans, are health plans from insurance companies that have a contract with CMS (Center for Medicare and Medicaid). Individuals who have Medicare Part A and B are eligible to choose a Medicare Advantage plan. Specialized plans exist for people with certain health conditions, but beyond that the general plans are not allowed to decline based on health except for very specific reasons.

When an individual is enrolled in the plan they do not lose their Medicare. They are entitled to cancel their Medicare Advantage plan, and the next month, they can go back to original Medicare. While enrolled in Medicare Advantage, they will have to use the insurance card provided by the Medicare Advantage plan instead of their Medicare card.

These plans may cost the participants nothing, or very little, though many still require the Part B participation amount. A Medicare Advantage plan is not free however. The plans receive a contribution from CMS every month, instead of having that tax money go to original Medicare. That is how the bulk of the plan is paid for, from tax money.

Traditionally, Medicare Advantage Plans were thought of as HMO plans were an insured person had to use the plan hospitals, doctors, and other medical providers to be covered. Many Medicare Advantage Plans are HMO plans. However, PPO Medicare Advantage plans also exist. Fee for Service Medicare Advantage Plans, or plans that will cover any medical providers who accept the insurance, are being marketed aggressively these days.

Your own medical needs and preferences will determine which plan will work out well for you. If your current medical providers contract with the plan’s HMO, then you may be very satisfied with comprehensive coverage with very little extra payments. If you like more choice, and area doctors will accept a Free For Service plan then you might consider an “Any Doctor” plan. Be aware that not all doctors work with the Fee For Service plans, even though the insurance company claims it will work with any doctor! A great compromise is provided by PPO plans. You get the greatest coverage at the lowest price inside the network, but will still be covered by other medical providers.

Most, but not all, Medicare Advantage plans also contain Part D, or prescription drug coverage. Medicare Advantage plans may have very low, or no, premium for the insured people beyond their normal Part B premium. Some plans even refund the Part B premium. Also, Medicare Advantage Plans are not allowed to do a lot of risk selection based upon health, so they may be a good choice for less healthy applicants.

A traditional Medicare Supplement is very different from Medicare Advantage. With Medicare Supplements you still use your original Medicare Card, and add your Medicare Supplement health card. These plans are also provided by insurance companies, but they simply supplement the coverage gaps and deductibles not provided by original Medicare Part A and Part B.

If you have Medicare Part A and Part B, your Medicare supplement plan will pay the portion of your medical bill that Medicare will not pay. Of course, Medicare supplement plans differ, and so you need to be aware of exactly which portions a Medicare Supplement plan will pay before you sign up. For instance, Medicare may be 80% of your hospital bill, and your supplement will pick up the other 20%.

Medicare supplements come with premiums, and also may exclude unhealthy individuals. However, they generally provide the broadest access to health care.