Obamacare includes changes to Medicare Advantage Plans:
The following changes to Medicare Advantage plans will be effective January 2014.
- Advantage plans will be held to a minimum loss ratio of 85%
- Requires restructuring the funding levels to Advantage plans in order to reduce payments closer to traditional Medicare (i.e. remove the 14% “overpayment”)
As a result, the following budget changes have been announced:
1) Congressional Budget Office estimates this will cut $145 billion over 10 years
2) The payment restructuring was designed to be implemented in 2011.
However, CMS had expanded “quality” payments to Medicare Advantage plans in 2012 through a demonstration program (outside of Obamacare). These payments effectively mitigated most of the impact of the Medicare Advantage funding cuts from Obamacare. The demonstration program is targeted to continue through 2014, at which time the additional bonus payments will end unless other measures are put in place.
MedicareBob Explains Medicare Advantage Plan Changes
Robert Bache says, “Medicare Advantage Plans are receiving less money from the Government, therefore the insurance companies are going to have to do better with less money. I look for the smaller Medicare Advantage companies to either go out of business, or be purchased by one of the bigger insurance companies.”
For Example, Care Improvement Plus has been purchased by United Healthcare, and Coventry has been purchased by Aetna.
What does Advantage Plan Consolidation mean?
For people with Medicare Advantage Plans, less companies means:
· Less options
· Less benefits
· Maybe more of a monthly premium
Robert Bache says, “The days of paying a $0.00 premium and receiving a rich Medicare Advantage Plan are ending soon. However, when you compare the benefits and premium of a Medicare Advantage Plan to an Employer or Private insurance Plan, Medicare Advantage Plans are still typically going to offer better coverage. Medicare Advantage Plans over the next few years should still offer good benefits for a low monthly premium.”
Robert Bache aka “MedicareBob™”
Robert Bache asks Twitter followers, “Is Obamacare destroying Medicare Advantage Plans?”