Medicare Advantage Plans Explained
One alternative to the traditional Medicare Plan—a
group of 154 privately sponsored insurance programs collectively
known as Medicare Advantage Plans—have just became
a lot more attractive than ever before. Back in 2004, the
Medicare Modernization Act began to provide Health Maintenance
Organizations with $1.3 billion.
That substantial sum is being used to widen health-care
choices, upgrade benefits, and cut costs.
The idea is as simple as “draw more Medicare enrollees
into private plans and hope that the competition between
them will help curb Medicare’s spending.” Unfortunately,
studies have shown that Medicare HMOs haven't done a particularly
good job of cutting down on costs in the past.
Whether or not the Advantage HMOs will succeed in cutting
the healthcare costs of the 36.4 million Medicare participants
who aren’t in private plans (that’s 89% of Medicare’s
enrollees) also isn’t clear. To make a more informed
decision, you’ll first need to get to understand how
these health plans work and how they differ, then decide
which option is best for you.
Here’s a brief description of the range of features
that the Medicare Advantage Plans have in common:
- Your Advantage Plan will be run by a private insurance
carrier.
- You can count on the fees your carrier receives
from Medicare being pre-set, no matter how little or how
much healthcare
you require.
- Your private insurer will decide the rules
for covering your payments and benefits.
- Each year, your
private carrier will decide whether or not to offer their
Medicare Advantage plan.
- Each year, you’ll be able
to decide whether or not to stay in your Advantage plan,
switch to another plan,
or return to traditional Medicare.
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