Learn About Changes to Avoid Medicare Confusion
- Created on October 20th, 2006
Senior Educators is an organization that provides enrollment assistance and education on Medicare plans
The Centers for Medicare and Medicaid Services (CMS) recently released detailed information on the Medicare Advantage health plans available to beneficiaries next year. In 2007, there will be nearly two times the number Medicare Advantage plans available to seniors than in 2006.
According to a statement from CMS, the 2007 average monthly premium for a Medicare Advantage plan has decreased $8 from 2006. Choice and savings are likely to drive significant Medicare Advantage enrollment in 2007 and beyond. Today, nearly 7 million, or about 17% of Medicare beneficiaries, are enrolled in Medicare Advantage plans; CMS estimates enrollment will reach 30% of beneficiaries by 2013.
Medicare Advantage plans are health plans offered by private health companies that combine Medicare doctor, hospital and often prescription drug insurance into a single plan. In 2007, there will be significantly more plans to choose from, with 1,163 different Medicare Advantage Plans available nationally, as compared to 960 in 2006.
One of the most important changes to Medicare in 2007 is the widespread availability of comprehensive Medicare Advantage plans for less than the cost of a stand–alone drug plan. Most Medicare beneficiaries have low–priced plans available, which include prescription drug coverage in addition to health care benefits. WellPoint, UnitedHealth, Humana, WellCare, Pyramid and Coventry Medicare Advantage plans are available nearly nationwide with monthly premiums as low as $0 a month. The additional Medicare Advantage plan options are not limited to their traditional urban stronghold, with rural areas accounting for most of the growth in plans.
"Medicare Advantage plans are going to prove to be a great value for many seniors in 2007," says Brian Poger, President of Senior Educators. "In a time of rising health care costs, the average Medicare beneficiary who joins an Advantage plan for the first time will save about $1,000 a year in medical expenses."
According to information released by CMS last month, the average senior that switches to a Medicare Advantage plan from original Medicare, with or without a Medi–Gap supplemental plan, will save $82/month, or about $1,000 year. Medicare Advantage plans may also include additional benefits beyond original Medicare such as dental, vision or hearing benefits for no additional cost. These plans are often successful in lowering individuals’ total health care costs because they manage health care holistically and align individuals’ incentives to healthcare purchasing decisions.
More Choices and Plan Changes in 2007 Mean More Confusion
The bad news is that seniors currently enrolled in a Medicare Advantage or drug plan that were planning on staying in their plan next year many be in for a surprise. In 2007, some plans will be changing their formularies and benefit structures from last year as a way to increase profits without increasing monthly premiums. Additionally, some plans are also dropping out of specific markets or out of certain states altogether.
"Seniors may be surprised about some of the changes in their Medicare health or drug insurance in 2007 and should carefully examine these changes," Poger cautions. "While some plans have gotten better in 2007, other plans have significantly increased co–payments for healthcare services and these increases may not be apparent to the average consumer that’s primarily paying attention to their premiums."
Confusion in selecting a Medicare plan will again likely be a potential issue for many seniors due to the increase in the total number and types of plans available in 2007. In addition to the Medicare managed care plans, such as the HMOs and PPOs, the increasing availability of Private–Fee–For–Service–Plans, which do not limit or penalize members for visiting out–of–network physicians, is increasing. Available for the first time in 2007, will be Medicare Savings Accounts, plans that combine a high–deductible insurance plan with a "savings account." Insurance companies will often deposit some money into these accounts to help reduce an individuals expected out of pocket costs.
In addition to the large increase in Advantage plans available next year, the number of stand–alone Medicare prescription drug plans have also increased. A total of 404 different plans will be available in 2007, compared to 363 in 2006.
"The most important thing to remember this year is to shop around before choosing a plan," suggests Poger. "Seniors should be cautious about enrolling through an insurance company that is pushing only their plans because those plans may not necessarily best meet their health needs or their budget."
Medicare information and enrollment assistance is available through the Senior Educators Free Advice Line at 1–800–505–8515. Help is also available online at www.SeniorEducators.org.