2011 Medicare Advantage Plans: More Scrutiny from Medicare

CMS (The Centers for Medicare & Medicaid Services) is taking a closer look this year at Medicare Advantage plans and the co-pays enrollees must pay for medical services.  Their objective is to spot Advantage plans with high co-pays that help the plans “cherry pick” healthier enrollees.

High co-pays for durable medical equipment such as oxygen are considered discriminatory.  Co-pays for a stay in a skilled nursing facility will be another target for CMS.  When these co-pays are raised by an Advantage plan, sicker members will likely shop for a plan with lower cost sharing. Having the option to change to another Advantage plan with lower cost sharing is a good thing for seniors, but CMS is concerned that some plans are pushing sicker, more costly enrollees out, with a goal of attracting and keeping healthier seniors.  Healthier enrollees lead to  higher profit margins for insurance companies.

Healthy seniors who are shopping for a Medicare Advantage plan will often look at high co-pays for something like oxygen and say that doesn’t affect them. If the co-pay for a skilled nursing facility (SNF) starts from day 1 at $100 per day, that may not concern a healthy 65 year-old.  A senior with health problems will likely avoid this Advantage plan.

Medicare Advantage plans have flexibility in designing their benefit packages, but (1) they must provide all Medicare-covered services except hospice care, (2) their overall cost sharing requirements must be actuarially equivalent or lower than those under Medicare fee-for-service, and (3) they cannot discriminate on the basis of health status.

According to the Government Accountability Office (GAO), of the 2,930 MA plan benefit packages submitted for contract year 2010, about 40 percent were identified as likely to be discriminatory.

Then there are MOOPs:

To help provide financial protection to beneficiaries who might otherwise have high cost-sharing expenses, Medicare Advantage plans may voluntarily establish out-of-pocket maximums (OOPs or MOOPs) which are dollar limits on the amount a beneficiary must pay in cost sharing during the year.  For contract year 2010, CMS allowed Advantage plans with a MOOP at or below $3,400 greater flexibility in establishing cost-sharing amounts.

Folks turning 65 and shopping for a Medicare Advantage plan should compare several plans and their co-pays.  In 2011, all Advantage plans are supposed to have a MOOP, but some will be $3,400 and some may be $6,000 or higher.

The 280,000 Arizonans already enrolled in a Medicare Advantage plan should study the Annual Notice of Change they will receive in October from their Advantage plan.  Their plan may change for the better by finally having a MOOP.  Or their plan may introduce a MOOP but raise co-pays for specialist visits, hospital stays, and other services.

People enrolled in Medicare Advantage plans will be able to switch plans between November 15th and December 31st this year, with the change taking effect on January 1, 2011.  After January 1, they will be locked into their MA plan for the entire year – unless they want to get out of Medicare Advantage and go back to Original Medicare (and enroll in a pay for a stand-alone Part D plan). This change will be allowed during the first 45 days of 2011.


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4 Responses to "2011 Medicare Advantage Plans: More Scrutiny from Medicare"

  1. It seems that with all the cuts to the Medicare Advantage program the future viability of this program is somewhat dire. I’d be curious to see if others think it can last past 2013?

  2. Carol says:

    I also doubt that medicare advantage plans will last in a few years.  When we have to go to medicare it will be costly as we will have to get an expensive supplement (medigap) PLUS Part D where you have a $350 deductible before drug benefits kick in…rip off.    I dread the thought!  Also “stopping the fraud” in medicare, if it saves any money it’s going to go to the uninsured not to “save” medicare.  And also all they talk about is “wellness programs” …I am more interested in exrays, mri’s etc.  Since they don’t mention those important items they will obviously be rationed by Donald Berwick .  Google him.

  3. One commonly confused detail regarding the annual enrollment period is there is no enrollment period for Medicare Supplemental Insurance. You may change a Medicare supplement policy at any time. This year many of those over 65 are choosing Medicare Supplement plans over Medicare Advantage. Some reasons include the freedom from networks in Medicare Supplement, the better benefits, and the new Medicare Supplement plans M & N with premiums more in line with many Medicare Advantage plans. For expert advice you can consult one of the many experts at the Senior Advisors Group.

  4. Mary says:

    I did check into an AARP Medicare Supplement insurance program.
    $250 a month!  YIKES! 
    Are these people NUTZZZZZZZZZZZZZZZZ???
    We are NOT made of money!

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