Fact Sheet: The Health Care Law and Medicare Advantage

• Plans must use some of the bonus money they receive toward providing extra benefits and rebates to people who are participating in the plans. This means higher quality plans may be able to offer you more services.
  
• Medicare Advantage plans cannot charge more than Original Medicare for certain services, such as chemotherapy administration, kidney dialysis and skilled nursing care.
  
• Starting in 2014, Medicare Advantage 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

Currently, Medicare makes extra payments (subsidies) to the private companies that offer Medicare Advantage plans. Because of that, Medicare Advantage plans cost the Medicare program an average of 13 percent more per person than Original Medicare.

• In 2012, Medicare starts to reduce these subsidies so payments will be 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 or "doughnut hole" and to provide more preventive care to people with Medicare.
  

What this could mean for your Medicare Advantage plan

• Plans will differ in how they respond to the lower subsidies. This will depend partly on the state and county where the plan is located and on the amount of bonus money the plans receive.
  
• The 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 even decide to leave the Medicare program.
  

Learning about changes to your Medicare Advantage plan

Every year, even before the health care law, insurance companies that offered Medicare Advantage plans made decisions about what they would cover and what they would charge. Each insurance company will continue to make a business decision on whether to change your benefit package and costs.

As in previous years, you will receive a notice from your Medicare Advantage plans in the fall. It will tell you what changes, if any, will take place in your plan for the upcoming year. This is the time for you to review your options carefully and make the best choice to fit your needs.

• If you have questions about the notice, you can contact your Medicare Advantage plan directly. You can also call 800-Medicare (800-633-4227) and speak with a representative about your options.
  
• You can also compare your options online. This site lists the Medicare Advantage plans that are offered in your area.
  

If your plan is changed or dropped, you can switch to another available Medicare Advantage plan or to Original Medicare during Medicare's open enrollment period.