Whether you’re new to Medicare or you’re waiting for the annual open enrollment to start October 15, one option to seriously consider is the Medicare Advantage plan. This alternative to Original Medicare is offered by private health insurance companies. Enrollment in Advantage plans has already set a record this year with 14.4 million beneficiaries choosing from the many different types of Advantage plans.
Medicare Advantage plan enrollment has kept growing even though there’s been a slight decline in the number of different plans available. In certain metro areas, people have a choice of up to two dozen Advantage plans with several insurance companies competing.
When they first become eligible for Medicare, most beneficiaries have a choice of several private health insurance plans that will provide their Medicare benefits. If you chose Original Medicare then, you have the chance to try an Advantage plan again every year during an open enrollment period. That lasts from October 15 through December 7.
The Kaiser Family Foundation reports growing enrollment numbers since the enactment of Medicare’s prescription drug benefit. Both Advantage plans and Part D Prescription Drug plans have covered medication since then. The foundation indicated the number enrolled in private Advantage plans has actually tripled over the past seven years.
What Does 2014 Look Like for Medicare Advantage Plans?
Medicare Advantage plans have already been impacted by health care reform. Reimbursements were reduced overall by about $156 billion to make Advantage plans more competitive with Original Medicare.
Policies are now ranked on a five-star system with top-rated plans getting larger federal subsidies. Other plans faced cuts in the subsidies that contributed to lower premiums.
Carl McDonald, a Citi Investment Research and Analysis director, says, “Most plans expect to face a 5 percent overall reduction in Medicare payments” next year. He thinks that will be a problem for insurance companies selling coverage where few doctors and hospitals are around to negotiate rates with, like in in rural areas. Less changes will be seen in metro areas.
If your Medigap premiums are getting too high or you only have Original Medicare, let us know and we can help you decide if a Medicare Advantage plan might be a good alternative.