Medicare Advantage Plans

Medicare Advantage Part C

“C” stands for “Choice” or maybe because the next letter after B is C or "C" stands for Clinton as the president that pushed a major Medicare Reform. One may choose a “Medicare Advantage Plan” (another name for Part C). Various private insurance companies regulated by CMS and State's insurance regulators are paid by CMS Medicare a “per member per month covered life” amount of money based on the resident’s State they live in and their age. The insurance company uses an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization) consisting of doctors and hospitals, and pharmacies that have agreed by contract to their reimbursement rate. These contracts allow the insurance company to control their costs and pass those savings to their members. However, the members are limited to the panels and will not cover medical expenses outside their panels except as specified. This limits one's freedom to pick a Primary Care Provider or Specialist or Hospital to just those contracted with the Insurance Company.

HMOs require a Primary Care Provider (Internist, Family Practice, and Nurse Practitioner). Any other medical care must be by PCP referral within the network of the HMO. This means that if one moves outside the network area, one must change the health insurance plan. Also, “Snow-Birds” who live 6-months in Oregon and 6-months down south should verify with their insurance company and verify that the doctors down south will accept to see them.

PPOs allow patients the right to self-refer to any specialist within the PPO network. The patient may even go outside the PPO network if the clinic or doctor agrees to see them. But the patient will be balanced billed for any part of the service beyond what the insurance company reimburses. A PCP is not a requirement of the plan. Those costs are tracked separately from the costs of in-network care and apply to separate Maximal Out Of Pocket considerations in going outside the network. In other words, there is more freedom of choice in a PPO plan, but the cost is higher, and the financial liability is higher if out-of-network services are used.

A PCP acts as a gatekeeper or, better, the team leader directing and coordinating the global care given to the patient.

Part C actually costs the government more than Part A and Part B would cost. Because of that and because of private companies maybe more economically efficient compared to a federal bureaucracy, the benefits to the covered lives are a little richer and may cover vision, hearing, hearing aid discounts, dental, drugs, preventative care, telephonic nurse advice line, and gym memberships, chiropractic, naturopaths, Acupuncturists, massage therapists, and acupuncture that are not covered by Original Part A and Part B. Most Part C plans make a significant effort to provide preventative services to keep you healthy and out of the hospital and ER to promote health and reduce their financial exposure to expensive services.

Between October 15^th and December 7^th of each year, one may change Part C plan insurance company to another insurance company or plan within the same company or return to original Medicare (Part A & B). This period is called the “Annual Enrollment Period." If your Part C plan is working well for you, the plan will automatically renew you for the next calendar year unless during Open Enrollment you opt to change plans or companies.

There are “Special Enrollment Periods” the rest of the year for those individuals that relocate their residence outside the service area of their Part C plan. A move from Portland to Eugene would necessitate a change, although one is not required to change, companies and companies have multiple plans in each state they do business in.

Maximum Out of Pocket Costs

Original Medicare (Part A + Part B) has no limit on personal financial liability for healthcare costs. Medigap plans limit most but not all Out-of-Pocket Costs after their deductibles and limits of coverage. Part C Advantage plans do have a contractual maximum out-of-pocket cost limit provided one stays within the network. Maximum financial risk is between $2,000 to 6,000 per calendar year, depending on the particular plan.

Medicare Part C Advantage and Disadvantage

Therefore the “Advantage” is:

• One insurance company for all one’s healthcare needs.

• The lower total premium expense for more covered services.

• Contractual limit of annual maximum out-of-pocket expenses.

• A “Pay-as-you-go” model. Set cost for each physician visit or a test called a co-pay rather than a deductible requiring the patient to pay 100% of service cost at first of plan year until the deductible is met. Care services with co-insurance (such as a liability to pay 20% of a cost) are limited to just a few services. The costs are just enough to incentivize against doing them but inexpensive enough that needed services are sought and avoid expensive ER or hospital utilization.

• Company incentivized for preventative health, incentives for quality management of chronic disease to reduce long term company financial risk for patients with chronic disease, incentives to reduce the need to access expensive ER and Hospital services by supporting outpatient services through primary care medical homes using teams of various level personnel under a PCP direction for optimal care when and where it is needed and anticipated.

• Oversight by Medicare itself to incentivize the insurance company and the physicians individually by “carrot and stick.” policies based on monitoring metrics indicating quality medical care. Payment for performance initiatives, including electronic health records and annual reporting by physicians to CMS (Medicare) of their metric statistics.

The downside of Medicare Part C Advantage is:

• Limited by a defined geographic area. (Such as in Portland the plans can be limited to Multnomah, Clackamas, Washington counties, and a separate Eugene plan limited to Lane, Benton, and Linn counties.)

• Limited to a select panel of physicians, hospitals, urgent care centers, and pharmacies.

• Forced to have and utilize a Primary Care Provider to orchestrate simple healthcare needs, preventative healthcare needs, and a complex network of specialists when so indicated.

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