Thursday, February 2, 2012

January Surprise - Medicare Edition

Industry pundits predicted a dismal year for Medicare Advantage plans but SURPRISE . . . premiums are down and enrollment up.

Forget that many PFFS model Advantage plans pulled out of some counties due to strict CMS requirements. According to Bloomberg, net enrollment in Advantage plans increased.

The enrollment rise to 12.8 million exceeded Medicare projections in May that membership would peak at 12.5 million in 2012 before falling to about 9.2 million by 2018 as cuts kick in on federal subsidies to insurers. The average premiums dropped to $31.54 per month, the U.S. Department of Health and Human Services said in a statement.

Enrollment up in 2011 followed by a slight projected drop for 2012. Final 2012 enrollment won't be known for a few more months.

My own observation is many seniors living on a fixed income are motivated by the lower premiums (as low as $0) and will buy these plans in spite of the shortfalls.

Medicare Advantage plans have a lot of moving parts, are not portable from state to state or even within a state if you use non-par providers, and have a LOT of out of pocket.

But seniors are willing to gamble on their health remaining relatively good in hopes of saving money on a net basis by purchasing an Advantage plan vs. original Medicare plus a Medigap plan.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group in Washington, wrote in an e-mail that plan members will face “higher out-of-pocket costs, reduced benefits and fewer health-care choices” as the health law’s payment cuts accelerate

Some earlier studies predicted the number of seniors enrolled in Advantage plans by 2018 would be half current levels, and that prediction may become true.

As providers become less willing to accept patients with these plans and out of pocket costs rise, seniors who get stung by these plans may be willing to return to Medicare and a supplement plan . . . assuming they can qualify.

And therein lies the rub.

If you have a Medicare Advantage plan and move out of their service area, or the plan withdraws from the market in your area, you have a guaranteed right to return to Medicare and a Medigap plan. But if they voluntarily opt out of an Advantage plan (regardless of the reason) to return to Medicare they will have to go through medical underwriting before they can purchase a Medigap plan.

As if this isn't enough, provisions in Obamneycrap call for reduced funding for Medicare and Medicare Advantage plans as a way of paying for health care needs of the poor.

Paraphrasing the president, "I think at some point you have had enough health care"

How is this working for you?

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