By this point, most people have heard that 2010 will be a year of significant change in the Medicare Supplement and Medigap arena. While final legislation governing these plans has yet to pass, we do know that 428,000 Americans covered by Medicare Advantage private fee-for-service (PFFS) will be losing their coverage as of January 1, 2010.
With Coventry Health Care Inc. and WellCare Health Plans will be dropping PFFS nationwide, customers covered by these plans will soon find themselves in a “special enrollment period,” during which time they can enroll for a new PFFS plan with another carrier. These customers will be assured of getting new coverage without going through medical underwriting, with their new coverage beginning on January 1, 2010.
Both Coventry and WellCare cited the Obama administration’s policy to cut payments to Medicare Advantage insurers as the primary reason for dropping these plans, as well as a government mandate that such insurers will need to develop networks starting in 2011. Coventry currently has 318,000 customers under its PFFS Medicare Advantage plan, while WellCare has 110,000 under their plan. It will be interesting to see if other PFFS Medicare Advantage providers will attempt to pick up these customers, or drop their own PFFS plans due to the significant increase in costs caused by new government policies.
At this time, it looks like CIGNA will remain a major player in the PFFS market. CIGNA also offers optional dental and vision coverage, as well as the convenience of online enrollment. Their Medicare Advantage plans come with maximum annual out of pocket limits as low as $2000, hospital stays with co-payments as low as $30 a day, as well as $30 co-payments for outpatient surgeries.