Medicare Advantage

With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans, instead of through the Original Medicare plan (Parts A and B). These programs were known as Medicare+Choice or Part C plans.

Pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the compensation and business practices changed for insurers that offer these plans, and "Medicare+Choice" plans became known as Medicare Advantage (MA) plans.

Overview

Medicare has a standard benefit package that covers medically necessary care that beneficiaries can receive from nearly any hospital or doctor in the country. For people who choose to enroll in a Medicare private health plan, Medicare pays the private health plan a set amount every month for each member. Members may have to pay a monthly premium in addition to the Medicare Part B premium and generally pay a fixed amount (a copayment of $20, for example) every time they see a doctor. The copayment can be higher to see a specialist.

The private plans are required to offer a benefit “package” that is at least as good as Medicare’s and cover everything Medicare covers, but they do not have to cover every benefit in the same way. Plans that pay less than Medicare for some benefits, like skilled nursing facility care, can balance their benefits package by offering lower copayments for doctor visits. Private plans use some of the excess payments they receive from the government for each enrollee to offer supplemental benefits. Some plans put a limit on their members’ annual out-of-pocket spending on medical care, providing some insurance against catastrophic costs over $5,000, for example. But many plans use the excess subsidies to offer dental coverage and other services not covered by Medicare and can leave members exposed to high medical bills if they fall seriously ill. Private plan members can end up with unexpectedly high out-of-pocket costs.

In 2006 enrollees in Medicare Advantage Private Fee-for-Service plans were offered a net extra benefit value (the value of the additional benefits minus any additional premium) of $55.92 a month more than the traditional Medicare benefit package; enrollees in other Medicare Advantage plans were offered a net extra benefit value of $71.22 a month more.

Medicare Advantage Plans that also include Part D prescription drug benefits are known as a Medicare Advantage Prescription Drug plan or a MAPD.

Enrollment in Medicare Advantage plans grew from 5.4 million in 2005 to 8.2 million in 2007. Enrollment grew by an additional 800,000 during the first four months of 2008. This represents 19% of Medicare beneficiaries. A third of beneficiaries with Part D coverage are enrolled in a Medicare Advantage plan. Medicare Advantage enrollment is higher in urban areas; the enrollment rate in urban counties is twice that in rural counties (22% vs. 10%). Almost all Medicare beneficiaries have access to at least two Medicare Advantage plans; most have access to three or more. The number of organizations offering Fee-for-Service plans has increased dramatically, from 11 in 2006 to almost 50 in 2008. Eight out of ten beneficiaries (82%) now have access to six or more Private Fee-for-Service plans.

External links

Governmental links - current

• CMS official web site at cms.hhs.gov
  • Medicare at cms.hhs.gov
• Medicare.gov — the official website for people with Medicare
  • Official Medicare publications at Medicare.gov — includes official publications about current Medicare benefits
    • Medicare & You handbook for 2008 at Medicare.gov — includes information about current Medicare benefits
  • Information about the 1-800-MEDICARE helpline from Medicare.gov — a 24X7 toll-free number to call with questions about Medicare
  • Medicare Modernization Act at Medicare.gov
  • Medicare Plan Choices at Medicare.gov — basic information about plan choices for Medicare beneficiaries, including MA Plans
  • Prescription Drug Coverage homepage at Medicare.gov — a central location for Medicare's web-based information about the Part D benefit
    • Landscape of plans — state-by-state breakdown of all plans available in an area, both stand-alone PDPs, as well as MA-PD plans
• MyMedicare.gov — Medicare's secure online service where beneficiaries can access their own personal Medicare information

Governmental links - historical

• Medicare Is Signed Into Law page from ssa.gov — material about the bill-signing ceremony
• Historical Background and Development of Social Security from ssa.gov — includes information about Medicare
• Detailed Chronology of SSA from ssa.gov — includes information about Medicare
• Early Medicare poster from ssa.gov

Non-governmental links

• Congressional Research Service (CRS) Reports related to Medicare from the University of Texas Libraries
• Center for Medicare Advocacy — National education & advocacy organization.
• Medicare Rights Center — Medicare Rights Center is an education and advocacy organization.
• Medicare.org — Medicare information site including descriptions of Part A through D
• Medicare & Medicaid Resources — Medicare information site
• Kaiser Family Foundation — Wide range of free information, including a drug benefit calculator, about the Medicare program and other U.S. health issues.
  • State Health Facts — Data on health care spending and utilization, including Medicare; provided by the Kaiser Family Foundation.
• Medicare - Alliance for Health Reform The nonpartisan, nonprofit Alliance for Health Reform offers information about health reform, in a number of formats, to elected officials and their staffs, journalists, policy analysts and advocates.
• HealthDecisions.org — Medicare information from America’s Health Insurance Plans (a national association of American health insurers).
• Social Security and Disability News Resource Center
• Issue Guide on Medicare — Policy alternatives and public opinion analysis on Medicare from Public Agenda Online
• How Stuff Works - Medicare