Medicare
Advantage, did you know?
Medicare Advantage. . . Something for nothing can't be a good
deal. . . or is it?
You may have
wondered how a Medicare Advantage insurer can charge $0 premium
for a plan and make money. Intuitively, something for nothing
creates doubt in the mind of an agent and consumer.
Here’s
how it works. Medicare Advantage plans are health options that
are part of the Medicare program. By joining one of these plans,
a person receives all Medicare-covered health care through an
insurance carrier. Insurers are reimbursed generally in a range
of nearly $10,000 per enrollee based on a complicated formula
based upon a member’s gender, geographic location, the
cost of care the person is likely to receive, etc. By 2007,
Medicare will adjust payment to carriers based on an enrollees’
risk profile.†
Any premium
the carrier charges the customer, even if it is $0, is in addition
to the income it received from the federal government. Remember,
it is against federal law to describe the plan as “free”
or “no cost”. It is acceptable to describe it as
a zero dollar premium plan.
To the extent
that co-pays and consumer education help control utilization,
it is conceivable that a carrier can offer better benefits than
Original Medicare at little or $0 monthly premium and turn a
profit.
The carrier
must offer a benefit program that is as good as or better than
Original Medicare. Prescription drug programs, preventative
care and other discounts programs are commonly offered to make
Medicare Advantage plans more attractive. In addition, caps
on maximum out-of-pocket costs to seniors can make the plans
more appealing.
Just like the
new Prescription Drug program, the availability of Medicare
Advantage plans (also called Medicare Part C) appears to be
working with roughly 50,000 new enrollees in these plans each
month.‡
Propelling the
growth of Medicare Advantage plans are Private Fee-for-Service
plans. These plans are increasing in availability in rural areas
and allow the client to go to any provider as long as the provider
accepts Medicare Assignment and accepts the payment plan terms.
Truly, there
is no “free lunch” although many plans are marketed
using seminars at a local restaurant. The reality is that Medicare
Advantage plans receive a significant portion of their funding
not in the form of monthly premiums but in federal government
reimbursements. The level of reimbursement to the Medicare Advantage
plan is determined annually.
Senior Market
Sales, Inc. believes that having a solid Medicare Advantage
plan in an agent’s portfolio is just good business. The
privatization of Medicare has roughly doubled the available
market for health products to seniors. These plans aren’t
for everybody but combined with a solid Medicare Supplement
portfolio, agents have more products that meet the needs of
more seniors than ever before.
The market has
changed and opportunity awaits the agent who understands the
changes in Medicare and masters Medicare Parts C and D.
At Senior Market
Sales, we are experts in Medicare Solutions. We can help you
make more money, save time and place your business in a position
of distinction.
Contact us at
1-877-645-0147 to round out your senior insurance portfolio
or visit us at www.seniormarketsales.com.
To
become certified to sell Medicare Advantage or contracted with
one of our carriers call our Medicare Solutions hotline at 1-877-645-0147.
