Cost Of Medicare Advantage Plans May Be Increasing Next Year

By Author: Neha Mehta
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Cost of Medicare Advantage Plans May Be Increasing Next Year

Premiums that seniors pay for Medicare Advantage plans are likely to increase an average of 25 percent by 2011, largely because insurers - in response to federal requirements -- are cancelling many plans that carry no premiums.

Many experts claimed that insurers were increasing premiums in reaction to the government's decision to cut payments to Medicare Advantage by 4.5 percent. However, the reason that insurers cited for the increase is a 2008 law which requires Private-Fee-for-Service (PFS) plans to establish provider networks. Rather than undertake this task, insurers are dumping many of these plans.

Why Choose a Medicare Advantage Plan

Medicare Advantage plans are health care plans which offer an all-in-one solution to Medicare. When you join this type of program you get all your Medicare-covered health care - Part A, Part B and Part D - through this one plan. You merely use the health insurance card that you get when you join the plan.

To join a Medicare Advantage plan, you must enroll in Medicare Part A and Part B. You pay ...
... for your monthly Medicare Part B premium and depending on the Medicare Advantage plan you choose, you may or may not have to pay a monthly premium for it as well. However, the more insurers that eliminate their PFS plans the more likely it is that there will be a premium associated with the plan.

The benefit is that you generally get extra benefits and lower copayments than in the Original Medicare plan. However, not all Medicare Advantage plans operate the same way, so be sure to get the facts. Some plans require pre-authorization before getting services or seeing a specialist.
Keep in mind that you are usually required to see only the doctors that belong to the plan and go to specific hospitals to get services.

And this is where insurers are choosing to eliminate their PFS plans in order to avoid having to establish provider networks. The estimate is that Medicare Advantage plans will drop by more than 40 percent.

Choosing the Medicare Supplement Insurance Option

Medicare beneficiaries who choose to stay with their Medicare Advantage plan, the AARP advises you to keep an eye out for letters from your plan entitled Annual Notice of Change. In it your insurer must specify all changes in costs and benefits for the next year.

When you join a Medicare Advantage plan, says Alan Weinstock, insurance broker at http://www.MedicareSupplementPlans.com, your Medicare supplement insurance policy will no longer work. That means you no longer get the benefit of your Medigap plan paying for your deductibles, copayments or other cost-sharing.

Medicare doesn't cover everything. In fact, there are several gaps in coverage and that is why you may want to buy Medicare supplement insurance, also called Medigap insurance. This is health insurance that helps pay for some of your costs in the Original Medicare program and for some care it doesn't cover.