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Medicare News
Medicare Advantage Plans Higher Than Traditional
Medicare for Some Seniors
Medicare Advantage plans to cost Medicare extra $54
billion from 2009 to 2012, GAO reports
Feb. 29, 2008 - Private Medicare Advantage plans
can cost beneficiaries more than traditional Medicare for home health
care, nursing homes and certain hospital stays, according to a report
released on Thursday by the
Government Accountability Office, the
New York Times reports.
Although Bush administration officials and insurers
say that MA plans provide cost savings to beneficiaries in the form of
lower copayments and deductibles, the report found that because the
experiences of certain beneficiaries do not align with the average, some
pay significantly more out of pocket than they would in traditional
Medicare.
According to the report, in 2007, "19% of Medicare
Advantage beneficiaries were in plans that projected higher cost-sharing
for home health services, and 16% of beneficiaries were in plans that
projected higher cost-sharing for inpatient services."
The report also found that about 48% of MA
beneficiaries were in plans with an out-of-pocket maximum, ranging from
$2,750 to $4,600. Insurers often say annual limits protect Medicare
beneficiaries from high costs, but some MA plans exclude certain
treatments and medical expenses from the annual out-of-pocket maximums,
according to the report.
GAO found that among MA plans with out-of-pocket
limits, 29% exclude the cost of certain cancer drugs, 23% exclude some
mental health services and 21% exclude home health care expenses. The
report found, "Beneficiaries who use these services may pay more in
total cost-sharing than is indicated by the plan's out-of-pocket
maximum."
Costs to Government
The report also found that the federal government "spends more per
beneficiary in Medicare Advantage than it does for beneficiaries in the
original Medicare fee-for-service program, at an estimated additional
cost to Medicare of $54 billion from 2009 to 2012."
Of the monthly per-beneficiary payments to MA
plans, 87% is used for medical expenses, or $683 of $783 per beneficiary
per month, according to the report. About 9%, or $71 per beneficiary per
month, is used for nonmedical expenses, including administration,
marketing and sales. About 4%, or $30, is considered profit, the report
found.
GAO found that the additional money paid to private
MA plans, which are reimbursed at higher rates than traditional
Medicare, is not well focused. The report states, "If the policy
objective is to subsidize health care costs of low-income Medicare
beneficiaries, it may be more efficient to directly target subsidies to
a defined low-income population than to subsidize premiums and
cost-sharing for all Medicare Advantage beneficiaries, including those
who are well off" (Pear, New York Times, 2/28).
Humana Offers Members Gift Cards for
Participating in Health Practices
Humana last month launched a program, called "Healthy Returns," that
provides its Medicare plan beneficiaries with gift cards to
Macy's,
CVS,
Lowe's and
Borders as an incentive to adopt healthier lifestyles,
Florida Health News reports. The program involves three pilot
projects.
Under the first program, beneficiaries who enrolled
in coverage this year can earn a $15 gift card if they complete a health
risk assessment. The assessment will determine whether beneficiaries
should exercise more, change their diets or take other steps to reduce
the risk of developing health problems. To date, 35,000 beneficiaries
nationwide have earned the reward. The two other projects include a more
extensive preventive care program and a disease management program for
diabetics. Those programs offer gift cards valued up to $125.
Scott Latimer, Humana's market president for senior
products in central and north Florida, said, "It's much less expensive
for Humana to help people maintain their health than to treat them when
they are acutely ill," adding, "Humana is increasingly aware that to be
successful, it's not enough to provide strong benefits for people who
are ill. We need to get better at reaching out to people to help them
maintain their health" (Jaffe, Florida Health News, 2/26).
KaiserNetwork.org daily report
for Feb. 28, 2008
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