24 April 2009

Medicare Disadvantage (Redux)

Today, in its Friday Alert to members, the Alliance for Retired Americans reports that The Centers for Medicare and Medicaid Services has established stricter rules for private insurance companies, effectively cutting subsidies to Medicare Advantage (MA) plans by up to 5%.

Currently, the government overpays MA plans an average 14% more per beneficiary than for traditional fee-for-service Medicare. However, according to The Wall Street Journal, under the new regulations, MA plans cannot charge low-income and sick patients more than traditional Medicare, must explain what is covered in the Part D "doughnut hole"coverage gap, and will face extra scrutiny if patients' annual out-of-pocket costs are not capped at $3,400 or less.

The changes are designed to allow consumers to more easily compare options and costs. Medicare officials said they would try to eliminate plans with fewer than ten enrollees that are similar to other plans and make it hard for seniors to compare. Also changing: charges for hospitalizations, out patient services and other services often associated with chronic illnesses -services for which MA plans have been particularly likely to charge patients more than traditional Medicare would. However,many industry experts say beneficiaries enrolled in MA plans will likely face increased premiums or fewer benefits next year.

"The Alliance welcomes the changes," said Edward Coyle,Executive Director of the Alliance. "Insurance companies will no longer be able to use their government subsidies to unfairly treat sick and disadvantaged seniors".

I believe this is an important first step in the overall effort to keep Medicare healthy and viable for future generations of retirees and seniors and to make it a model, or keystone, for universal health care.

To learn more about this, please click on these posts from earlier this month.

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