What’s the future for Medicare Advantage?

The New York Times has an article about how payment cuts to Medicare Advantage plans are raising questions about the future of Medicare Advantage.

I say, “Only time will tell”, and that time will be next September when all Medicare Advantage plans send out their Annual Notice of Change (ANOC). Every person enrolled in a Medicare Advantage plan receives an ANOC by the end of September.  The ANOC informs people how their Advantage plan will change in the next year.

The New York Times article is titled, “Medicare Changes Prompt Enrollees to Reconsider Plans”.  The author says premiums will rise – but most Arizona plans have $0 premium.  The New York Times article says co-payments will go up – but most co-pays are pretty high already, especially for visits to specialists. The lowest co-pay is now $35 and the highest is $50 to see a specialist – it depends on the plan a person has joined.

The Arizona market for Medicare Advantage is very competitive, so if one company introduces a premium for their plan and others do not…. people will jump to a $0 premium plan.  Most seniors don’t want to change their plan and many don’t even read the ANOC and are unaware of changes.  Many seniors don’t seem to care if the hospital co-pay goes from $250 to $350 per day (days 1 -5).  One plan’s hospital co-pay is now $395 per day (days 1-3), but lots of people chose to stay with that plan.

What really got people changing plans from 2013 to 2014 was when one Medicare Advantage plan dropped the Silver Sneakers benefit.  Now that got people moving!  And that plan lost over 2,000 enrollees.

Payment cuts to Medicare Advantage plans have not been finalized, and intense lobbying is fighting proposed cuts. Humana has said reduced payments as proposed will not adversely affect their business. So, all the talk about “the future of Medicare Advantage” seems a bit premature.  That could all change next September, but we’ll have to wait and see.

For a short video about Medicare Advantage check out  AN INTRODUCTION TO YOUR MEDICARE CHOICES.

 

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