If you have a Medicare question you’d like answered, email it to AskRoger@SeniorMarketSales.com.
“I have heard rumors for quite some time that as part of the Affordable Care Act (OBAMACARE), Medicare Advantage plans will be gone. Is there any substance to this or is Medicare Advantage here to stay?”
While nobody can predict the future, I would say maybe “going away” would be too harsh of a statement to make. The Affordable Care Act does change the funding of Medicare Advantage. Currently, when a beneficiary leaves Original Medicare and joins a Medicare Advantage plan, the carrier receives an amount equal to the average Original Medicare claim for that area plus an additional payment to manage the claims.
Running Medicare through private insurance companies was supposed to save money through the magic of the marketplace. So far, it has never worked without additional funding. Because of this funding, Medicare Advantage has consistently cost more than standard Medicare. All Medicare beneficiaries that are paying a Part B Premium have been part of this subsidy. When the funding is cut, Medicare Advantage will have to do without the additional funding.
All ACA does is end this overpayment. Marilyn Moon, vice president and director of the health program at the American Institutes for Research, has said that the reductions for Medicare Advantage providers are “a matter of basic fairness because they’ve been overpaid for years.” In the end, I do think you will see higher premiums and quite possibly no $0 premium plans.
If the carriers are looking for additional money, it can only come from 3 places: reducing benefits, increasing premiums or lowering commission. Hang on to your billfold.