In 2011 Medicare Advantage Must Cap Patient Expense

In 2011, Medicare will require every Medicare Advantage plan to have an annual maximum-out-of-pocket (MOOP). This is good news for 30,000 or so seniors in Tucson whose Advantage plan does not have a MOOP.

A MOOP is a cap on expenses for co-pays and co-insurance, and the maximum limit is expected to be $6,700.  However, CMS (Centers for Medicare and Medicaid) encourages Advantage plans to have lower MOOPs and will reward plans that voluntarily cap members’ expenses at a lower amount, such as $3,400.

A MOOP is important when someone has a chronic illness or multiple hospitalizations during a given year. Co-pays for specialists ($35-$45 for each visit), co-pays for MRIs ($150), and hospitalization at $200 per day, can add up. So Medicare is going to require every Advantage plan to set a cap for its members’ annual co-pays.

Cancer is an illness that requires large co-pays for chemo and radiation treatment (20% of the bill) and can quickly add up to five or even ten thousand dollars.  An Advantage plan with a MOOP of $3,400 means that after the member has paid this amount “out of his own pocket”, he will have no more co-payments or co-insurance for the rest of the year. (Some plans have a MOOP but still require co-pays for doctor visits and labs after the MOOP is met.)

The Medicare Advantage plan with the largest enrollment in Tucson (over 28,000 members) does not have a MOOP. I recently got a call from a woman whose mother-in-law is in this plan and is being treated for breast cancer.  The co-pay for chemotherapy under every Medicare Advantage plan in Tucson is 20% of the bill.   So a person enrolled in a plan with a $3,400 MOOP would have their chemo cost capped at $3,400 through the end of the year.  A person in a plan with a $5,000 MOOP will stop paying at $5,000.  A person in a plan with no MOOP can only wait and see what their total bill will be.  I have heard of people whose 20% co-pay was $10,000.

I have a client who paid $7,000 for radiation treatment for cervical cancer.  That was three years ago.  She told me she charged her payments on her credit card.  She said she is almost finished paying off that credit card bill – three years later.  I cringed when I heard this, realizing she probably paid twice that $7,000 amount with all the interest she incurred over three years.


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6 Responses to "In 2011 Medicare Advantage Must Cap Patient Expense"

  1. Jim Hunt says:

    People have a choice of lower doctor and hospital co-pays today with a traditional HMO that requires referrals and prior authorization over an open-access HMO with a $3550 or higher Maximum Out-of-Pocket limit.  

    Every benefit mandated by the government will raise the cost or reduce a benefit elsewhere.   People, this year, still have the choice.

  2. medicareblogger says:

    Most insurance agents I know do not want to sign someone up for a plan that has no cap on a person’s expenses. Most Advantage plans have incorporated a cap already, so it should not be a game changer.  It will just mean that people’s choices among MA plans will be better choices.

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