Medicare Advantage costs scheduled to increase
How much will your Medicare Advantage plan cost?
If you are getting your health care through a Medicare Advantage plan you should expect to pay more for your coverage. Medicare Advantage plans are plans that are provided by private health care companies such as Aetna, Cigna, Coventry, Health Net, Humana, United HealthCare, and WellCare but are approved through Medicare.
These plans have also been called Medicare Health Plans, Medicare Part C Plans, and MAs/MA-PDs (and originally, Medicare Advantage Plans were called Medicare+Choice plans in the past and are used to combine your Medicare Hospitalization (or Medicare Part A) and Medical insurance or Doctor's Visit Coverage (or Medicare Part B) into one Health Plan.
Announcement for cost increase for Medicare Advantage plans to be made Monday
The Centers for Medicare and Medicaid Services (CMS) had initially proposed a 2.3% reduction in what the government pays the insurance companies that provide the plans. Insurance companies have rallied against the cuts calling them drastic. They also note that the increase, which is likely to be passed onto seniors, is unaffordable. The recent reductions announced by the CMS are in addition to an estimated $200 billion which is expected to be cut as part of Obamacare.
How many seniors could be affected? Its estimated that up to 47 million Americans have opted for Medicare Advantage Plans. These private insurance companies through the Medicare Advantage Plan provide more medical services than are provided under regular Medicare programs but at a lower cost. Private insurance companies are then reimbursed by the federal government.
Why are the reimbursement rates for Medicare Advantage going to be reduced?
The reduction in the reimbursement rate is the governments effort to reduce costs and save money for the Medicare program.
According to Emory University health care economist Ken Thorpe. "The insurance companies are getting it from all angles, which means seniors could eventually pay more for those plans and the plans may not be as attractive an option anymore.
When will seniors know the full costs? Not until the fall, and although the costs are not allowed to rise more than $30 per month, this increase could be high for some seniors, many of whom live on retirement or disability benefits.
Why did this happen?
Although this future reduction in benefits was denied during the Democratic presidential campaign, cuts to Medicare, which total $716 billion, were needed to fund the $1.9 trillion in new entitlement spending for the next 10 years. As mentioned above, many of those Medicare cuts came from the market-oriented Medicare Advantage program.
Unfortunately, what should have been discussed months before is only now coming to light and many argue that Obamas proposal may eventually make almost every Medicare Advantage plan in the industry unprofitable.
What will this mean for seniors? There could be up to 14 million seniors who get coverage through the Medicare Advantage programs who will be negatively affected because they will either lose coverage or will be forced to pay higher premiums.