South Carolina Medicare Advantage Plan Changes – Should I Stay Or Should I Go?

South Carolina Medicare Advantage plans, just like the Medicare Advantage program nationwide, are poised for some major changes in 2010 and beyond. Does this affect you and, if so, how? If you have a Medicare Advantage plan currently, should you keep the same plan, find a new MA plan or return to "original Medicare"?

The Advantage plan program is an alternative to "original Medicare". With this program, Medicare beneficiaries enroll with a private company for the management and administration of their Medicare benefits. Since the program's inception, it has been controversial in some circles, as the Federal Government pays the private companies a large amount of money per person, per year to manage each individual's Medicare benefits through the private company.

In early 2009, the Obama administration, in conjunction with the Centers for Medicare & Medicaid Services (CMS), announced plans to overhaul the way these plans are handled. These changes will affect the companies that administer the private plans, as well as those enrolled in them. Some of the major changes include:

  • As a large part of an announced $ 316 billion Medicare funding cut, funding to the private Medicare Advantage plans will be reduced. To go along with this, there will be a competitive bidding process for these private plan contracts.
  • Annual out-of-pocket expenses will be required to be capped in 2010. The anticipated cap amount is $ 3,400.
  • Plans with 10 or fewer enrollees in a certain area, or county, will be required to not offer plans in that area.
  • CMS projects that 10 million Medicare Advantage customers will face monthly premium increases of $ 40-70 per person in 2010. To go along with the higher premiums, many of the South Carolina Medicare Advantage plans will also be reducing services / coverage to compensate for lower reimbursement rates from the Federal Government.
  • Starting in 2011, the private MA plans are required to develop networks for their coverage. Currently, the private-fee-for-service (PFFS) plans are not required to have networks. This elimination of the PFFS plans as they are now is already having an impact for 2010. Coventry Health Care, Well Care Health Plans and Health Net all have announced the end to their PFFS plans as of 1/1/2010 – between these three companies , this affects 428,000 people nationwide.

Without a doubt, it is apparent that the marketplace for South Carolina Medicare Advantage plans is changing. Each individual must look past any pre-existing notions of the differences in "original Medicare" and the MA program and re-examine how these plans are going to work for them moving forward. While some may find it advantageous to stay with the government's Medicare Advantage program, even after all of the changes; however, others may find more reasonable and comprehensive Medicare Insurance coverage elsewhere.