Medigap insurance is not the only Medicare-related coverage that may be going through changes during the next few months due to the new health care reforms proposed by President Obama. Medicare Advantage Plans, which are also known as Medicare Part C plans, may also be experiencing change.
Here’s a bit of background information on Medicare Advantage Plans:
Medicare Advantage Plans are Health Maintenance Organization (HMOs), Preferred Provider Organizations (PPO), Private Fee-for-Service Plans, or Medicare Special Needs Plans. In order to enroll with a Medicare Advantage plan, you need to have Medicare Parts A and Part B, and you may have to pay a monthly premium to your Medicare Advantage Plan for extra benefits that they offer. Advantage plans are privately provided. You should not be simultaneously enrolled in a Medicare Advantage Plan and a Medigare Supplement Plan as they counter one another.
Current reports state that Medicare Advantage Plan payments to private health insurers will be limited to 2010 rates for the entirety of 2011. The proposed health care laws stipulate cuts amounting to $130 billion over the next ten years to these plans to prevent government overcompensation to insurance providers.
Provided that next year’s payments can’t match rising health care costs, what could occur is that insurance companies will offset the loss of payment increases by increasing the premiums that their customers are required to pay.
Medicare Advantage Plans and prescription drug plans also will need to have significant differences between their products due to CMS regulation which requires the elimination of duplicate drug and health plans. These differences range from plan types, client out-of-pocket costs, premiums, and formulary offerings.
Beginning in 2014, Medicare Advantage Plans will need to spend 85% of insurance premiums collected on providing health care to their customers as another limiting factor to overcompensation of insurance executives.
Learn more about Medicare supplements. Stop by Richard Cantu’s site where you can find out all about Medigap and what it can do for you.