Is Medicare Part C or Medicare Advantage worth the extra cost?
Recent studies show that Medicare Advantage plans may not be effective in lowering healthcare costs of seniors looking for additional benefits like dental
The structure of Medicare is based on various "Parts." Part A covers hospital stays, skilled nursing, and hospice services; Part B covers outpatient services, most doctors visits, and most drugs that need to be administered by medical professionals; and Part D covers most “self-administered” prescriptions.
In 1997, enacted changes to the Medicare legislation which allowed for Part C Plans, today known more commonly as Medicare Advantage or Managed Medicare. These plans “are another way to get your Medicare Part A and Part B coverage" and are offered “by Medicare-approved private companies that must follow rules set by Medicare.”
What does a Medicare Part C plan include?
To be eligible, a person must have a Medicare Part A and B plan, and after can opt into a Part C plan that offers other benefits like gym memberships, dental, and vision.
According to the Kaiser Family Foundation, in 2020, 39 percent or 24 million Medicare beneficiaries had a Part C plan. Enrollment in these programs has increased steadily over the years. Based on the enrollment trends, the Congressional Budget Office which provides analysis and research for lawmakers estimates that as many as 51 percent of beneficiaries could opt for a Medicare Advantage plan.
Who offers these plans?
There are only a handful of insurers that offer these plans, with "UnitedHealthcare and Humana together account for 44 percent of all Medicare Advantage enrollees nationwide, and the BCBS affiliates (including Anthem BCBS plans) account for another 15 percent of enrollment in 2020."
Following these organizations are CVS Health, Kaiser Permanente, Centene, and Cigna, which together accounted for just under a quarter of all enrollments.
Do these plans save seniors money?
These plans are funded through premiums, deductibles, and federal funds given to private insurance companies to run the programs. In 2017, the National Bureau of Economic Analysis found that only around 30 percent of the total revenue of these plans when to covering medical care.
EARLIER: House of Representatives voted to suspend the debt ceiling pic.twitter.com/IqHl5ZC80v— The Hill (@thehill) September 30, 2021
However, in recent years these Part C plans have come under scrutiny after various reports found that “only about one-fifth of the extra reimbursement gets passed through to patients in the form of lower premiums, better care or more services.”
As for the other profits, the vast majority are pocketed by the companies, some of which spent them “advertising--to attract more Advantage members, so they can claim more of the enhanced reimbursement, which they use to advertise to get more members."
In their new blog, author @Kenjterry and @davidmuhlestein of @LeavittPartners argue that we need a better understanding of the key differences between #MedicareAdvantage and traditional #Medicare in order to know which approaches would better curb costs. https://t.co/xYS7F2Snmj— Health Affairs (@Health_Affairs) March 11, 2021
However, proponents of the program claim that while this may have been true in the earlier years of the program, health spending has increased to more expected numbers. When selecting a new program, it is very important to know that once you opt into Medicare advantage, it may be challenging to switch back to the basic benefits.
In an interview with NerdWallet, the online financial news outlet, Tatiana Fassieux, a training specialist with California Health Advocates, argues that "people contact their state health insurance assistance program, which can provide free, unbiased, one-on-one counseling."
These programs may be most beneficial to people with chronic illness or who could quickly pay their deductible if that means paying a slightly higher premium.
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