It will come as no surprise to many that the future of Medicare Advantage plans appears quite grim. With their future tied directly to congresional disdain for insurance companies and all business health care related, drastic changes are coming that will have significant impact on Medicare Advantage Plans in 2012 and beyond.
First, the elimination of the Private Fee for Service Model (PFFS). Ignoring some market based solutions PFFS plans have been eliminated in all but a handful of rural counties across America.
Followed up next year by significant financial cuts, Medicare Advantage insurers will have reimbursement cut by as much as 14% over the next 3 years. With the Majority of these cuts coming in plan years 2012 and 2013 Medicare Advantage HMO and PPO plans will likely have to raise premiums and decrease benefits to the tune of about $100 per month!
The net result: Medicare Advantage plans will become virtually insignificant and inappropriate for most Medicare Advantage Plan enrollees. Once cuts are fully implemented by 2014 any cost savings that was intended to make Medicare Advantage plans more affordable will shrink drastically if any remains at all. Considering that Medicare Advantage will be overshadowed by the ease, acceptance, and freedom to see any provider like the more traditional Medicare Supplement plans (Medigap), Medicare Advantage plans will offer little if any real advantage.
Factoring in co-pays, coinsurance (Associated with Medicare Advantage plans), referrals to see specialists, and the higher premiums, it dosn't seem that in most situations Medicare Advantage will be a wise selection over Medicare Supplement - Especially with the new plans M & N introduced this year.
For individuals currently on Medicare Advantage Plans they should strongly consider taking Advantage of the guaranteed issue provisions available if/when your Medicare Advantage Plan is terminated by the insurer. This provision last only 63 days from the final day of the Medicare Advantage plans coverage. For “premium” conscious individuals the Medicare Supplemental Insurance plan N may be a good choice. But be careful, there may be unforeseen rate increases lurking in some provider plan “N”s. For all: plans “F”, “G”, “C” should strongly be considered.
For Assistance and advice on Medicare Advantage Plans and Medicare Supplemental Insurance go to the request page and we will have a specialist from the Senior Advisors Group help you in making an appropriate Medicare Insurance plan selection. There is no cost for their service but they do request that you use their group to enroll.
For Insurance Agents - Keep your eye on the ball! Medicare Advantage will be gone in most areas by 2014.
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