Medicare Advantage Plans

Medicare Part C or Medicare advantage plans (MA) are privatized Medicare plans. To better understand this concept, here is an analogy: Many people living in rural areas have privatized mail delivery. The Post Office contracts with private mail carriers for so much per mile to deliver the mail. Once the private carrier picks up the mail from the Post Office, the delivery service from there on out is performed by a private party.

In a similar fashion, MA is privatized in that Medicare contracts with the insurance companies that offer MA plans. Medicare pays the insurance company a monthly capitation rate, meaning so much per head per month. It might start in the $720-$750 per month range. This amount can go higher for people with chronic illnesses or in higher cost regions of the United States. From that point onward, Medicare no longer pays any provider when an MA plan member has a claim. Instead, the MA plan pays the doctors and hospitals.

There are some people that erroneously believe that the premium the MA plan charges, let’s say from $0 to $150 per month, plus a person’s Medicare Part B premium ($104.90 per month for most people in 2013), plus the medical copays is what finances MA plans. That would be nice if that were the case, but it’s not. It’s the $720+ monthly capitation rate that makes MA plans work. Your Medicare Part B premium simply goes into Medicare’s or the government’s pot.

 

History

Depending on what source you start with, the concept of MA began with the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA). This act allowed privatized HMO plans to contract with Medicare to deliver a form of privatized Medicare. The Balanced Budget Act of 1997 established the Medicare+Choice program. The latter was renamed Medicare Advantage by one of the provisions of the 2003 Medicare Modernization Act (MMA). It was this act that also stepped up the controversial capitation rate to the MA plans.

 

SHIP - Overview of the Medicare Advantage PlanFor more details, please refer to this three-page document produced by SHIPOverview of the Medicare Advantage Program.

Types of Medicare Avantage Plans:

HMOs or Health Maintenance Organization Plans: In most HMOs you can only go to network doctors, hospitals, or other health care providers that are contracted with the plan. In an emergency, all hospitals must accept your plan. You may also need to get a referral from your primary care doctor to see a specialist.

HMO-POS: The “POS” stands for point-of service: This means that you can go to non-network providers. In many cases, you may have higher, out-of-network copays. Please check with your specific plan.

PPO or Preferred Provider Plan: Again, this is a networked plan. You pay lower copays for network providers and usually higher copays for non-network ones. PPOs are more suitable, in general, for going out-of-network.

PFFS or Private Fee for Service: This model is similar to original fee-for-service (FFS) Medicare. You can go to any provider that agrees to accept the terms and conditions of the plan.

 

Kaiser Medicare Fact SheetFor more details about the types of MA plans, please refer to the following documents: The first is the Kaiser Foundation’s Medicare Advantage Fact Sheet. Additionally, this document provides another historical perspective and other details about MA plans.

 

 

Medicare and You - Medicare.govCenters for Medicare & Medicaid Services (CMS) publishes Medicare and You. For more details about MA plans, please consult pages 15, and 70-81. This publication, though daunting for some, is very thorough and does a good job of explaining the subject it is covering. Note: The version that CMS mails to you lists the MA plans available in your county of residence. This generic version does not.

 

Many MA plans have Part D prescription drugs included with the plan. These are MA-PDs for short. If you enroll in an MA-PD, you do NOT sign up for a stand-alone Part D prescription plan. Doing so will disenroll you from your existing MA-PD plan.

There is another important wrinkle to understand. Some HMO or PPO MA plans are medical only. They do NOT have a prescription plan imbedded in them. If you have one of these MA plans only, you cannot sign up for a stand-alone Part D plan. Doing so will disenroll you from your HMO or PPO MA plan.

For more details and information, please consult with Medicare and You, call 1-800-MEDICARE (1-800-633-4227) or call any particular MA plan. Lastly, a good agent will be able to answer many of your questions. If you desire to dig into all sorts of statistical minutia about MA plans, go to CMS.gov.

Controversy
Here is the controversy concerning MA plans. It is beyond the scope of this document to do an in depth study, but I will bring up the basic issue. MA plans receive an extra subsidy from Medicare of around 13-14%. In other words, Medicare budgets so much money per month for every American on Medicare. The MA plans, subsequent to the 2003 MMA, receive about 13-14% extra subsidy above and beyond the funds that Medicare budgets.

Please refer to page 2 of the Medicare Advantage Fact Sheet, first column under the heading, “Payments to Medicare Private Plans”. This is what has allowed the plans to offer extras beyond what original Medicare offers, extras such as routine vision exams and eyewear, preventative dental, over-the-counter items, and health club memberships.

Medicare Supplements

Introduction

This section, Medicare supplements, is designed to assist you, the Medicare supplement shopper, to better understand the basics of a Medicare supplemental insurance policy. The first section, Benefits of a Medicare Supplement Plan, lists all of the possible benefits in a Medicare supplement plan. The next document is the standardized Outline of Coverage that almost all Medicare supplement companies use in their literature.

 

Q: What does this standardization mean?

A: Taken from my Ten Mistakes: Congress passed the Medicare Improvement Act in 2008, which streamlined the 20 year-old 1990 plans, dropped redundant plans, and added the new plans M and N. The new plans are called the Modernized Plans and are in effect for all Medicare supplement plans sold after June 1, 2010. Now we have plans A, B, C, D, F, G, K, L, M, and N.

If a shopper is looking at Plan F, for example, then he or she would understand that the Plan F from any particular insurance company pays claims according to the benefits as outlined by the legislation. So, if you are looking at Plan F that is offered by Company X, then you will know that the Plan F offered by Company Y, Z, and so forth has the same benefits. The same is true for any other lettered plan.

 

The Lettered Plans

The next eleven pages show the benefits for each lettered plan. The benefits that are not in the plan being discussed are faded out.

 

When you can change your Medicare supplement plan

There is much confusion concerning when you can and can’t change your Medicare supplement plan. This document presents the technical details of the rules for your various options.

 

Are you Eligible for a Refund?

This account presents a case history of a party that initially thought that they could not change the husband’s Medicare supplement outside of the October 15-December 7th Annual Election Period (AEP). It also explains how you, the consumer, can get a refund for an advance paid premium.

 

What to do with that stack of stuff delivered to your mail box

Learn about a smart and clever move, you the Medicare supplement shopper can make. This document explores the BIG mistake the majority shoppers unwittingly make and how to avoid making this mistake in the first place. In discussing the process for avoiding this mistake, this section offers you some strategies of how to manage the barrage of company literature that slams and jams your mailbox during the months preceding your 65th birthday. This information may also be useful for those past 65.

About

For over fifteen years I have been specializing with people who are Medicare beneficiaries. It’s an age group that I sure enjoy working with. I’m on Medicare myself.

I am fully sympathetic with people that are perplexed by their looming 65th birthday and trying to figure out the daunting number of choices regarding their Medicare options.

There are lots of agencies selling Medicare products, so what sets Northwest Senior Insurance apart from just about everyone else?

I’ll start with our Mission Statement:

The words in any mission statement may sound lofty, but what do they really mean in actual life’s experiences? The following are some examples.

Sometimes it’s advising people that they don’t need a Medicare supplement because they have a perfectly good employer or government health plan. From time to time we have encountered people on Medicaid who thought that they should have a Medicare supplement. We have recommended to them that they consult their case worker as they likely will not need it.

On other occasions we have shown people that a lower cost Medicare supplement plan may be a better value for their situation. Lastly, we have shown people a money saving tip concerning their enrollment in a Part D prescription plan.

We would rather walk away from a visit with no sale rather than doing anything that compromises our standards for honesty and doing what’s right for our people. Recnetly, I (Lance) was in a home for almost two hours and just about had a lower cost Medicare supplement application ready for the party’s signature. Then a last minute detail arose which meant that it was doubtful that I could save her any money. I told her that she would have to keep her present plan for another year, and then we would revisit the situation then.

What do I mean when I say “care and respect” in my mission statement? Sad to say, seniors, and younger people for that manner, have become victims of not only scams, but just shoddy marketing by people who view their customers dispassionately as a way to just make a buck. A few months ago I was in a home in Kalispell, Montana, and the party, we’ll call her Karen, showed a mailer to me that had a plastic, wallet-sized card attached to it. The card had her name embossed on it and said something like “Medicare Preferred Review”.

Karen was confused and initially thought that it was something from Medicare. She called the 800 number on the mailer and left a message. Within thirty seconds some agent called her back pushing his more expensive Medicare supplement plan. Needless to say, this was a boiler room operation. In my opinion, such flim-flam marketing, especially to seniors, is despicable.

Another party, Donna, reported to me her encounter with an outfit from Florida that contacted her initially via email in regards to replacing her existing Medicare supplement. After the initial contact, she told the outfit that she was no longer interested. They called her back multiple times. Apparently they didn’t understand the meaning of the English word “NO”.

Sad to say, the marketplace is rife with this kind of shoddy and unethical marketing. Unfortunately, it doesn’t stop with just the boiler room operations. I’ve seen many questionable things printed in mailed brochures from name-brand companies. You would think that they would know better, but they, too, push the envelope on ethics.

None of the afore-mentioned examples has any place in our practice at Northwest Senior Insurance. Rather, it is our intent to treat everyone that we meet with the highest degree of honestly and respect.

Welcome

Hi and welcome, I’m Lance D. Reedy, CSA, an independent agent and owner of Northwest Senior Insurance. I specialize in working with Medicare beneficiaries.

The time has come for you to select a Medicare supplement, Medicare advantage plan, and/or Part D prescription plan. The most important decision you will make is selecting a knowledgeable agent who holds your best interests above all else. As an independent insurance specialist, I welcome the opportunity to help you understand your options, find the best value for your situation, and provide you with the kind of service that you can count on.

Maybe you are past 65 and your Medicare supplement premiums have gone up. I’ll do my best to find lower cost options for you. Remember, you can change your Medicare supplement any month of the year.

I specialize with the following Medicare related products:

In addition, I also carry other lines of insurance that are important in the senior market:

  • Life insurance
  • Final expense or burial policies
  • Short term care insurance
  • Long term care insurance
  • Traditional fixed annuities

Your Shopping Type

Identifying your shopping type is most helpful when shopping for a Medicare supplement. Understanding your shopping type helps you to avoid the Ten Medicare Supplement Shopping Mistakes. Most importantly, doing so also helps you to get the best buys without paying more than you need to. Click on the blue eagle below to learn more…

Avoiding the Three Major Mistakes and having the correct mindset when shopping for a Medicare supplement will give you the peace of mind that you made the right choice.