Some Medicare Plans Are Being Dropped As Federal Requirements Tighten

Posted in Health Care , Health Insurance , Medicare

October 5th, 2009

Approximately 660,000 seniors will lose their private Medicare plans next year as a result of Congress tightening up federal requirements, according to Medicare officials. The majority of affected seniors are enrolled in Private Fee for Service (PFFS), a type of Medicare Advantage plan that allows patients to see any doctor they like as long as the doctor is willing to accept payments through the plan.

The plan, which is federally-subsidized and run by insurance companies, has seen a sharp increase in enrollment over the past three years from 820,000 to over 2.44 million. The increase in enrollment has resulted in an increase in costs for the government. To manage costs more effectively, Congress voted in 2008 to require plans to establish a network of providers beginning in 2011.

Some companies have already established networks. For example, Humana set up networks that would cover at least 80 percent of PFFS enrollments. However, some companies have taken the alternate route of dropping their beneficiaries. WellCare Health Plans, Inc. is dropping approximately 110,000 enrollments and UnitedHealth Group, Inc. will no longer offer coverage to 2 percent of its members.

Those who will no longer be able to participate in the PFFS plan will still be able to participate in other Medicare Advantage plans, private plans, or traditional Medicare.

Medicare officials also announced that those participating in Medicare Advantage plans will see a premium increase from $32 a month to $39 a month. These premiums are predicted to increase drastically over the next 10 years, if President Obama’s plan to reduce government support for Medicare Advantage plans of $100 billion (to help pay for expanding coverage to the uninsured) goes through.

Do you participate in a Medicare Advantage PFFS plan? If you are, are you concerned about how these federal adjustments could affect you?