The law and Medicare Advantage

The law changes the way Medicare pays for Medicare Advantage plans that could result in changes to your particular plan. As usual during open enrollment, you have the option to stay with your current plan, switch to a new one or move to Original Medicare.

A focus on quality and value: The law rewards Medicare Advantage plans that provide high quality care. The law also establishes new rules to make plans more cost-effective.

• The Centers for Medicare & Medicaid Services (CMS) has a rating system for Medicare Advantage plans. Plans that rate at least three out of five stars by CMS now receive bonus payments for providing you with better quality care. You can review your plan's rating at any time on Medicare's website.
  

• Plans must use some of the bonus money they receive to provide extra benefits and rebates to people participating in the plans. This means that higher quality plans may be able to offer you more services.
  
• Medicare Advantage plans cannot charge more than Original Medicare for certain services. These include chemotherapy administration, renal dialysis and skilled nursing care.
  
• As of 2014, plans must limit how much they spend each year on administrative costs. For each dollar you pay in premiums, Medicare Advantage plans may not spend more than 15 cents on administrative expenses.
  

Changes in how Medicare Advantage plans are paid: In the past, Medicare paid subsidies to the private companies that offer Medicare Advantage plans. This means that these plans cost the Medicare program more than Original Medicare — on average about 13 percent more per person.

• As of 2012, Medicare has started to reduce these subsidies so payments are more in line with Original Medicare.
  
• The changes in Medicare Advantage payments will save the Medicare program money. Some of the savings will be used to close the Medicare prescription drug coverage gap and provide more preventive care to people with Medicare.
  

What this means for your Medicare Advantage plan: Plans differ in how they respond to the lower subsidies. Lower subsidies could mean that some plans may drop extra services, such as eyeglasses and gym memberships. Some plans may raise their premiums and co-payments. Others may decide to leave the Medicare program.

How you'll know about changes to your Medicare: Each year insurance companies that offer Medicare Advantage plans made annual decisions about what they would cover and what they would charge. As usual, during Medicare open enrollment you have the option to stay with your current plan, switch to a new one, or move to Original Medicare.

• If you have questions about the notice, you can contact your Medicare Advantage plan directly. You can also call 800-MEDICARE (800-633-4227) to speak with a counselor about your options.
  
• You can compare your options at Medicare Plan Finder. This Web page identifies the Medicare Advantage plans offered in your area.
  
• If your plan is changed or dropped, you can switch to a different Medicare Advantage plan or to Original Medicare.