The health care law adds a number of benefits and protections to the coverage you already get with Medicare. It also changes how Medicare Advantage plans operate. If you have a Medicare Advantage plan, it is important to know what the law means for you.
Focus on quality and value
The health care law rewards Medicare Advantage plans that provide high quality care. The law also sets up new rules to make plans more cost-effective.
There’s now a rating system for Medicare Advantage plans. Plans that rate at least four out of five stars will receive bonus payments for providing better quality care. You can review your plan's rating online.
- Plans must use some of the bonus payments they receive for extra benefits and rebates to people participating in the plans. This means that higher quality plans may be able to offer you more services.
- Plans must limit how much they spend each year on administrative costs. For each dollar received in premiums, Medicare Advantage plans must spend at least 85 15 cents on care.
Changes in how Medicare Advantage plans are paid
Currently, Medicare pays subsidies to the private companies that offer Medicare Advantage plans. This means that these plans cost the Medicare program more than Original Medicare.
In 2012 Medicare started 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
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.
- 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 copayments. Others may even decide to leave the Medicare program.
Learning about changes to your Medicare Advantage plan
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.
When evaluating different plans, remember to consider:
- Cost: What are the monthly premiums, annual deductible and copays?
- Coverage: What services are or aren't included?
- Quality: How does the plan rate on providing care?
You should use Medicare’s Annual Election Period – commonly called “open enrollment” – as an opportunity to review your Medicare choices and select a plan that works best for you. Open enrollment takes place every year between Oct. 15 and Dec. 7.
- If you have questions about the notice, you can contact your Medicare Advantage plan directly.
- You can also compare your options online. This site lists the Medicare Advantage plans that are offered in your area. You can also call 800-Medicare (800-633-4227) and speak with a representative about your options.