Medicare Advantage works like this:
Medicare's cost is, roughly, $830.00 per MONTH per beneficiary. This is a 2008 figure, I believe, used to set the “capitation rate” or the “census rate” or what every you want to call the cost of Medicare divided by the number of Medicare beneficiaries. In other words, the plans DO save the government some money, in my opinion, because they look backwards for the funding amount, which is then transfered to the insurance companies if a beneficiary decides to enroll in Medicare Advantage. Any inflation for the current year is eaten, in effect, by the insurance company.
In a Medicare Advantage Plan, the government would send that $830.00 to the insurance company, in addition to sending about $91.00 of the $96.40 Medicare Part B premium to the insurance company. (Medicare Part B is means tested, the premium is not the same for everyone.)
If the beneficiary needs massive amounts of medical care, it doesn't matter, the insurance company must cover the entire loss.
Why are the plans good for Seniors?
Well, for one thing, there is usually NO PREMIUM or a very low Premium, to the Medicare beneficiary, for the plans, over and above what the government transfers to the plans on behalf of each beneficiary.
Premiums range from Zero to about $40.00 a month.
Unlike the traditional Medicare Supplement coverage, Medicare Advantage clients/beneficiaries are asked to pay more out of pocket expenses for doctors visits or hospital stays.
However, there is an “out of pocket maximum” in most of the plans, which limits the risk a great deal.
In most cases, a Medicare Supplement costs between $100.00 and $150.00 per month at age 65, for a Plan F, non smoker.
By the time the client reaches age 70, premiums might be well over $200.00 per month.
If you can get a Medicare Advantage plan, with ZERO premium, and a $2,500.00 out of pocket maximum, WHY PAY THE PREMIUM???
You are facing a GUARANTEED “loss” or expense, in premium payments, of $2,400 VS a slight possibility that you might pay a total of $2,500.00 in out of pocket expenses.
It should be noted that there is NO out of pocket limit for anyone who tries to insure themselves with Medicare, all by itself, with no supplement or MA plan.
Yes, there are some “extras” in the Medicare Advantage plans, depending on what you want. Most companies offer MAPD or Medicare Advantage Prescription Drug plans, where you can roll all of your insurance into one program.
Also, health clubs, some dental coverage, and some optical coverage, things you can not get in standard Medicare, are often offered in these plans.
Obama and the Marxists in Congress do not like Medicare Advantage because it is PRIVATIZED MEDICARE, and these guys are all about NATIONALIZATION, not Privatization!
And here is the reason AARP supports healthcare reform, they will sell more supplemental policies. They represent themselves, not seniors!
The same thing is going on with Tricare Prime for miltary retirees under 65 that don’t live near a base. Are they trying to spread the pain and make the public beg for single payer?
later
Why can't this same principle be the basis of a Balanced Budget Amendment?
Politicians are forever using the excuse that they can't set the budget for a given year, because they don't know ahead of time how much they will receive that year in tax receipts.
But politicians should have a pretty good idea what we collected last year. Why not set the budget for the next year at what we collected last year? If we are always setting budgets based on two-year old tax receipts then that will be something of a discouragement to inflation.
Every once in a while we might actually spend less than we receive in a particular year and get to eliminate some of the debt.
Does this idea make too much sense to implement?
I've been selling health insurance to older people since 1963. That's 3 years before there was even a federal Medicare Program. Your summation of Medicare Advantage was highly accurate and well presented. Others should bookmark this thread and especially your reply as a reference!!!
The only thing you may have left out is that the more remote a county is within a state, the less likely an insurer is to offer one of these plans, especially if it's an HMO instead of a PPO. (due mainly to lack of member doctor providers also approved by Medicare)
bkmrk