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Medicare Advantage plans

Miami Herald - 9/29/2021

Medicare Advantage, a managed care approach to Medicare, has become the healthcare program of choice for seniors in Florida.

More than 50 percent of Medicare beneficiaries in Florida are enrolled in Medicare Advantage plans, compared with the national average of 42 percent, according to an analysis by the Kaiser Family Foundation (KFF), a nonprofit health policy think tank.

These are the plans you see heavily advertised during Medicare’s Open Enrollment period, which runs from Oct. 15 to Dec. 7. The plans take effect Jan. 1.

Miami-Dade has high Medicare Advantage enrollments

“In Florida, 51% of all Medicare beneficiaries in the state are enrolled in Medicare Advantage, and the share by county ranges from 16% in Monroe County (Key West) to 73% in Miami-Dade County,” the study noted.

Florida has one of the highest percentages of Medicare Advantage beneficiaries in the country, along with Minnesota (50 percent). In fact, the two states account for at least 50 percent of the Medicare beneficiaries enrolled in Medicare Advantage plans, according to the Kaiser study.

The number of people enrolled in Medicare Advantage plans has more than tripled since 2000, going from 7 million to 26 million in 2021, the study found.

The appeal of Medicare Advantage programs, which are administered by private health insurers, has largely to do with costs.

In 2021, nearly two-thirds of Medicare Advantage beneficiaries had prescription drug coverage paid through their Medicare Part B premium, which was $148.50 per month. (Original Medicare transfers the premium to the insurance company in the Medicare Advantage plans.)

In Medicare, one has to buy a Part D plan for prescription drugs, with the cost of the coverage based on a person’s income level. Part D plans also have deductibles that require out-of-pocket expenses when you have reached a certain threshold in drug costs. (In 2021, that threshold was $4,130.)

Costs are important because many seniors can’t afford to pay significant out-of-pocket costs. Half of all Medicare beneficiaries lived on annual incomes below $29,650 per per person in 2019, according to another study by the Kaiser Family Foundation — and that was before the economic ravages of the pandemic.

The Medicare Advantage plans also provide benefits that are not available in Original Medicare such as eye exams and glasses, hearing exams and aids, dental care and fitness programs like Silver Sneakers.

Limited access to doctors, prior authorizations in MA plans

But, there are some key differences in the Medicare Advantage plans, primarily related to access to doctors, hospitals, nursing homes, rehab facilities and specialists.

Most Medicare Advantage plans are set up as Health Maintenance Organizations (HMOS), which means you have to go to the doctors in their networks. Those networks usually are limited to doctors in your home county. That can be an issue if you get sick and/or hospitalized elsewhere.

Some Medicare Advantage plans are PPOs, where you can see physicians outside the plan’s network, but those plans are more costly.

Additionally, Medicare Advantage plans usually require a referral to see a specialist, where Original Medicare does not. And many of the plan’s services require prior authorization.

“Prior authorization is most often required for relatively expensive services, such as inpatient hospital stays, Part B drugs, and skilled nursing facility stays, and is rarely required for preventive services,” the Kaiser Family Foundation study cited. “[It] is also required for the majority of enrollees for some extra benefits… including comprehensive dental services, hearing and eye exams, and transportation.”

Another thing to watch for with Medicare Advantage plans: Some of the plans have a co-payment when you are in the hospital, which can add up quickly if you are in the hospital for an extended period.

With Original Medicare, the first 60 days of your hospitalization are covered entirely. After that, there are co-pays that are based on the period of time you are in the hospital after 60 days.

The two biggest Medicare Advantage plans are UnitedHealthcare and Humana, which accounted for 45 percent of all Medicare Advantage enrollees nationwide in 2021, according to the Kaiser Family Foundation study.

Blue Cross Blue Shield accounted for 14 percent. Four other insurers — CVS Health, Kaiser Permanente, Centene and Cigna — made up 24 percent of enrollment in 2021. All other insurers accounted for 17 percent.

Does Medicare have enough money?

Medicare is funded through two trust fund accounts held by the U.S.Treasury, the Hospital Insurance Trust Fund and the Supplementary Medical Insurance Trust Fund.

The Hospital Trust Fund is funded primarily through payroll taxes, income taxes paid on Social Security benefits and Part A premiums, along with interest earned on the investments of the Fund. The Hospital Trust Fund supports Medicare, Part A, which includes hospital stays, nursing home care, home health care and hospice.

The Supplementary Fund , which funds Medicare Part B (medical insurance) and Medicare Part D (prescription drugs) is funded through money authorized by Congress.

The Hospital Insurance Trust Fund is projected to be depleted by 2026, according to the 2021 annual report of the board of trustees of the two trust funds. And, the report said, the Fund’s income is projected to be lower than last year’s estimates due to lower payroll taxes during the pandemic.

The Supplementary Fund is expected to be “adequately financed” over the next 10 years, the trustees’ report said, because income and revenues for Parts B and D are reset every year.

While Medicare experts don’t expect the Trust Fund to become insolvent, it may require changes in how payments to Medicare Advantage plans are calculated by Medicare.

In 2020, Medicare Advantage plans had an unexpected windfall in profits due to fewer people going to doctors and hospitals during the pandemic, while the plans received preset amounts from Medicare for each member, according to the Urban Institute.

In addition to Medicare recalculating Medicare Advantage payments, Congress most likely will step in to shore up funding, as it has done in the past.

After all, there are nearly 63 million people enrolled in Medicare in the United States, a number that is expected to grow as baby boomers continue to hit retirement age. That’s a large bloc of voters, or potential voters.

©2021 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.

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