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Medicare + Choice, or Medicare Part C, is a system designed to deliver your
health care benefits under Medicare.
Coordinated Care/Managed Care Plans
Managed care plans organize doctors and hospitals into health care delivery
networks with the intent of lowering costs and providing appropriate care by
"managing" the medical care provided. Under Medicare+Choice there will
be three managed care plan options available to beneficiaries.
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Health Maintenance Organizations – HMOs have been available to
Medicare beneficiaries for over 10 years, primarily as risk plans. HMO’s
must offer all Medicare benefits plus other uncovered benefits, but
enrollees are locked into receiving services from the HMO.
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Point-of-Service (POS) – HMO risk plans offer an option allowing the
beneficiary to receive services outside the network for higher out-of-pocket
costs.
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Preferred Provider Organizations (PPOs) – Like HMOs, PPOs have networks
of physicians and hospitals that have agreed to discount their rates for
plan members. But, unlike HMOs, many PPOs do not require members to see a
Primary Care Physician (gatekeeper) before seeing a specialist. Enrollees
are free to consult non-network health professionals but must pay higher
out-of-pocket costs.
Provider Sponsored Organizations (PSOs)
PSOs are new entities to both the managed care industry and to the Medicare
program. They are similar to HMOs in that they offer networks of health
professionals that provide comprehensive services. However, they are
established, organized and operated by locally based hospitals and physicians
groups rather than by insurance companies.
Private Fee-For-Service Plans (PFFS)
This new option allows insurance companies to offer Medicare beneficiaries a
private indemnity health insurance policy. Indemnity or fee-for-service policies
are "medical insurance the old-fashioned way." Medicare would make
fixed monthly payments to certain plans from which beneficiaries would purchase
a private indemnity health insurance policy that must offer at least the same
package of benefits provided under Medicare Parts A and B. The plan may also
offer supplemental benefits. There is no cap on the amount a beneficiary may be
charged in premiums for the plan, however, beneficiaries must be told before
they enroll what their premium will be for the coming year. In addition,
beneficiaries’ out-of-pocket cost for co-insurance and deductibles may not
exceed the "average amount" beneficiaries would pay in traditional
fee-for-service. Unlike traditional Medicare, the plan determines the rate of
reimbursement for all doctors and hospitals. Providers may not balance bill
their Medicare patients more than 15% above the payment level set by the plan.
(Balance billing in traditional Medicare fee-for-service is capped at 15% above
Medicare’s allowable payment.)
Medical Savings Accounts (MSAs)
The budget agreement offers another choice to Medicare beneficiaries – a
Medicare MSA demonstration project.
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Beneficiaries choosing this option will purchase a high deductible (up
to $6,000 in 1999) catastrophic health insurance policy to accompany a
medical savings account.
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Medicare contributions will be used to pay the premium for the
high-deductible/catastrophic plan. Any remaining amount will be deposited
into the individual’s MSA.
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The MSA catastrophic plan must provide coverage for at least the items
and services available under Medicare Parts A and B.
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Funds in the MSA will be used to pay for the cost of medical services up
to the level of the catastrophic policy deductible. It is likely that
beneficiaries will have to contribute a significant amount out-of-pocket to
pay for services before the plan deductible is reached.
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Doctors and hospitals are not limited in the amount they may charge
beneficiaries for services, i.e., unlike traditional Medicare, balance
billing limits will not apply for service delivered in an MSA plan.
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Beneficiaries enrolled in an MSA may not also have Medigap plan.
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Withdrawals from an MSA for non-medical purposes are subject to income
tax and, in certain circumstances, a 50% penalty.
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Enrollment in the MSA is limited to 390,000 beneficiaries. Beneficiaries
eligible for Veteran’s health benefits, military retiree health care, the
Federal Employee Health Benefits Program (FEHBP), as well as those eligible
for Medicaid, the Qualified Medicare Beneficiary (QMB) program, and the
Specified Low-income Beneficiary (SLMB) program may not enroll in a Medicare
MSA.
Religious Fraternal Benefit Society Plans
These are offerings, which may restrict enrollment to members of the
church, convention or group with which the society is affiliated. Payments may
be adjusted, as appropriate to take into account the actuarial characteristics
and experience of plan enrollees.
To be eligible to join a Medicare + Choice plan, you must:
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be entitled to Medicare under Part A
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live in the plan’s geographical service area or continuation area
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not have End Stage Renal Disease (ESRD) at the time of enrollment (with
the exception of age-ins)
A "continuation area" is a HCFA-approved geographic area
outside the plan’s service area where the Medicare + Choice Organization
furnishes or arranges for furnishing of services. When a member moves out of the
Medicare + Choice plan’s service area and into a continuation area on a
permanent basis, he or she may choose to continue the enrollment option Medicare
+ Choice Organizations have the option of establishing continuation areas.
In this context, the term "age-in" refers to a beneficiary
who was enrolled in a private plan that also provides services to Medicare +
Choice, developed ESRD while in the plan, then became eligible for Medicare and
"aged in" to the Medicare + Choice plan. In this instance, the
beneficiary must elect to join the plan during the initial election period, and
the plan must accept him or her.
Medicare + Choice provides for the following preventive benefits:
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Review the plans available in your area
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Determine the rules of coverage for the plan you are considering
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Determine your responsibility with the plan you are considering
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Determine what’s important for you
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Determine the fixed costs
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Get more information from the "Medicare & You" Handbook
and Medicare Compare
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Sign up only if you want to change your coverage. If everything is going
well with your health insurance coverage there is no reason to change.
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