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Health Care Coverage Options: Questions & Answers
Q. Does the new program force seniors into HMOs?
No. Seniors can choose to stay in traditional fee-for-service Medicare or select a private health plan option. The final choice rests with them.
Q.How does the new law effect Medicare's
private health plan options?
Beginning in 2006, beneficiaries will have a broader range of private health plan choices similar to those that are currently available to working-age Americans and to
federal employees.
In addition to the plans that currently cover almost 5 million Medicare beneficiaries, regional PPO-style plans will be available as a permanent option under the Medicare health plan program. These plans will give seniors the flexibility - if they are willing to pay higher fees - to receive care from doctors and hospitals that do not have contracts with their health plans.
Q.Doesn't the new law just subsidize HMOs?
No, the new law helps ensure a choice of health care coverage for seniors.
The new Medicare law does significantly increase the payment for Medicare Advantage (formerly Medicare+Choice), the private Medicare plan program. However, the law requires that plans pass on all increased funding to beneficiaries in the form of lower premiums, co-payments, and/or expanded benefits, including prescription drug coverage. In addition, the significantly higher payments from the government make it easier for plans to expand into new areas of the country.
Q. Why are these improvements in the Medicare Advantage program important for employers?
The size of the increase in payments represents a significant shift in commitment by the
government to the long-term stability and viability of this Medicare option since major funding cutbacks began in 1997.
The disruptions to retirees and employers caused by those cutbacks are likely to be a thing of the past. Employers may look again at this option for retiree health coverage.
Q. How does the new
law ensure more coverage choices and benefits for seniors in the Medicare Advantage program?
The new law already is providing immediate benefits for America's Medicare beneficiaries. The
American Association of Health Plans - Health Insurance Association of America (AAHP-HIAA) conducted a survey of member companies participating in the Medicare Advantage program showing that the new 2004 funding
rates will result in more affordable, enhanced coverage for Medicare Advantage beneficiaries.
Highlights from the survey include:
-Lower premiums: Plans representing more than 93 percent of Medicare
Advantage enrollees will use the money to lower monthly premiums, in some cases dramatically.
-Enhanced benefits: Plans representing more than 60 percent of beneficiaries will use the funding to enhance or
increase benefits, including prescription drug coverage, preventive screenings and disease management programs.
-Cost sharing: Plans representing 80 percent of beneficiaries will reduce the cost of co-pays
and deductibles.
-Expanded markets: Based on the new payment rates, roughly a quarter of Medicare health plans said they expect to expand beyond the markets in which they will partner with Medicare
this year.
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