Basics of Medicare Advantage Plans. Background Medicare is not a welfare program and should not be confused with Medicaid. Medicare is an “entitlement” program in that recipients pay into the system via payroll taxes, and therefore are
Basics of Medicare Advantage Plans
Medicare is not a welfare program and should not be confused with Medicaid. Medicare is an
“entitlement” program in that recipients pay into the system via payroll taxes, and therefore are
“entitled” to take out of the program. The income and assets of a Medicare beneficiary are not a
consideration in determining eligibility or benefit payments. Medicaid is different. A Medicaid
recipient must be able to prove eligibility for benefits via limited assets or limited income.
A private fee-for-service plan is defined as a
Medicare Advantage plan that
• reimburses providers, on a fee-for-service basis, at a rate determined by the plan;
• does not put the provider at financial risk;
• does not vary rates for the providers based upon their particular utilization;
• does not restrict the selection of providers among those who are lawfully authorized to provide the covered services, and who agree to accept the terms and conditions of payment established by the plan.
1. a private MA insurance policy with high annual deductibles (as much as $9,500 in 2007) and
2. a medical savings account.
Preferred Provider Organization Demonstration Plans (PPO Demo), Medicare Special Needs Plans (SNPs) Private Contracts, Cost Plans, and Other Demonstration Plans
1. The beneficiary is entitled to Medicare Part A and is enrolled in Medicare Part B as of the effective date of enrollment in the Medicare Advantage plan.
2. The beneficiary lives in the service area covered by the Medicare Advantage plan.
* The MA plan that the member is enrolled in is terminated, which is called involuntary disenrollment.
* The enrollee moves out of the service area or continuation area of the MA plan.
* The Medicare Advantage company offering the plan violated a material provision of its contract with the enrollee.
* The enrollee meets such other material conditions as CMS may provide, such as an involuntary loss of creditable group coverage, or a delayed enrollment due to an employer’s coverage or spouse’s employer group health insurance coverage being terminated.
Enrollees of a Medicare Advantage plan have the following financial obligations:
• All copayments/coinsurance shall be paid at the time of service.
• Enrollees must continue to pay their Medicare Part B premium. If they receive a Social Security monthly check, this premium is automatically deducted from their check. Otherwise they pay their premium directly to Medicare, or someone on their behalf pays it (such as the enrollee’s state Medicaid agency). In addition, some MA plans may pay all or part of the enrollee’s Part B premium for him or her.
• Most Medicare enrollees are automatically entitled to Medicare Hospital Insurance (Part A). If enrollees are not entitled to Medicare Part A, and they have purchased Part A through Social Security, they must continue to pay their Medicare Part A premium.
a copy of the person’s MA plan disenrollment notice; or
a copy of the letter that the person sent to his or her MA plan requesting disenrollment; or
a signed statement verifying that the person has requested to be disenrolled from his or her MA plan.
If a person is disenrolling later the March 31, a copy of his or her MA plan disenrollment notice will be necessary.
The Medicare Advantage organization may disenroll an insured from a plan only under the conditions listed below:
• The insured moves permanently out of the service area and does not voluntarily disenroll.
• The insured temporarily moves out of the service area for an uninterrupted absence of more than six months.
• The insured’s continuation of coverage of Part A is terminated.
• The insured’s entitlement to Medicare Part A or enrollment in the Part B benefits ends.
• The insured supplies fraudulent information or makes misrepresentations on his or her individual election form that materially affects the person’s eligibility to enroll in a Medicare Advantage plan or Medicare Parts A, B, and D.
• The insured is disruptive, unruly, abusive, or uncooperative with regard to his or her membership in the Medicare Advantage plan, and the behavior seriously impairs the provider’s ability to arrange covered services for the person or other individuals enrolled in the plan. Involuntary disenrollment on this basis is subject to prior approval by CMS.
• The insured allows another person to use his or her membership card to obtain covered service under Parts A and B.
• The insured fails to pay the plan premiums on a timely basis.
• The insured joins a stand-alone Medicare Prescription Drug plan, unless he or she is in a PFFS plan that does not include Part D coverage, or he or she is in a MSA plan.
Some people who have Medicare have other insurance (not including Medicare supplement policies), such as employer-sponsored group health insurance for the beneficiary or a spouse, that must pay before Medicare pays its share of the bill. The other insurance pays first if the insured meets any of the following criteria:
• is 65 or older;
• is currently working (or his/her spouse is currently working) for an employer with 20 or more employees; has group health insurance based on that employment;
• is under age 65 and is disabled;
• is currently working (or any member of the person’s family is currently working) for an employer with 100 or more employees; has group health insurance based on that employment;
• has Medicare because of permanent kidney failure; or
• has an illness or injury that is covered under any of the following: workers’ compensation, the federal black lung program, no-fault insurance, or any liability insurance