While Medicare Advantage may seem new to some of us, the introduction of private insurance plans to the Medicare program began twenty-five years ago. In fact, since the 1970’s many Medicare beneficiaries have had the option to receive their Medical benefits through private health insurance plans. The purpose of introducing private health insurance plans to the Medicare program were to give Medicare beneficiaries a choice of health insurance plans beyond original Medicare Part A and Part B, and to transfer the Medicare program efficiencies and cost savings achieved by managed care in the private sector. The Medicare Advantage plan has carried other names such as “Medicare+Choice” and “Medicare Part C.” These names may be sound more familiar than Medicare Advantage. A factor that makes Medicare Advantage plans appealing is the fact that the benefit package must be at least as good as original Medicare Parts A and B and cover everything that original Medicare covers, but they do not have to cover every benefit in the same way.

In 1997 the Balanced Budget Act of 1997 expanded private plan options through the newly-established “Medicare+Choice” program. As part a result of the expansion, local Preferred Provider Organization (also known as “PPO”), Private-fee-for-Service (also known as “PFFS”) and Medical Savings Account (also known as “MSA”) plans were authorized. This was a significant change for Medicare beneficiaries because before the Balanced Budget Act of 1997 the only option in additional to original Medicare Parts A and B with regard to private insurance plans was a Health Maintenance Organization (also known as “HMO”) plan.

The Medicare Modernization Act of 2003 revitalized the role of private health insurance plans in the Medicare program by renaming the program “Medicare Advantage” and by authorizing additional plan types to be offered to Medicare beneficiaries. The new plans authorized by the Medicare Modernization Act included regional PPO plans and Special Needs Plans (also known as “SNPs”).

Medicare Part D, or Medicare’s Prescription Drug Plan (also known as “PDP”), was implemented into the Medicare program on January 1, 2006. This was a much needed change because with original Medicare Part A and Part B, prescription drug coverage was, and is still is, very limited. A Medicare beneficiary’s enrollment in a Medicare Part D plan allowed them to have prescription drug coverage for an additional premium. Eligibility for enrollment by a Medicare beneficiary in a Prescription Drug Plan requires that the Medicare beneficiary be enrolled in original Medicare Part A or Part B (enrollment in both is not a requirement for a PDP). A Medicare beneficiary can enroll in a “stand-alone” Prescription Drug Plan with original Medicare Parts A and/or B, or the Prescription Drug Plan can be consolidated with a Medicare Advantage plan. However, enrollment in Medicare Advantage plan with a built in Prescription Drug Plan (also known as “MAPD”) requires that the beneficiary be enrolled in both original Medical Part A and Part B.

 

Medicare Pathways, Inc.