In an executive order, President Trump laid out several
directives for the HHS secretary aimed at protecting Medicare for seniors while
strengthening the Medicare Advantage program and providing more plan choices.
The Oct. 3 order directed the agency to promote choice through actions that "encourage
innovative MA benefit structures and plan designs, including through changes in
regulations and guidance that reduce barriers to obtaining Medicare Medical
Savings Accounts and that promote innovations in supplemental benefits and
telehealth services."
Out of the 22.4 million enrollees currently in an MA plan, about
6,800 are enrolled in a Medicare MSA, which is an MA plan bundled with a
tax-free savings account. The number of insurance companies offering them
currently stands at four.
Although MSAs are technically MA products, they work more like
Original Medicare in that they have no network and must be accepted by all
Medicare-participating providers, which are paid the lesser of billed charges
or 100% of the Medicare allowable rate.
Regarding the limited availability of such plans, MSA provider
Lasso Healthcare Insurance Co.'s President and Founder Jim Handlan explains
that an MSA may not be an ideal addition to an established carrier's portfolio
for several reasons. One is that the provider network is often an insurer's
primary asset, whereas an MSA has no network. Second, it may be difficult for
insurers with multiple Medicare products to sell something that is so different
from an HMO or a PPO, he suggests. But Handlan says that's a "surmountable
problem," while the bigger challenge lies with reimbursement and risk.
MSA enrollees tend to be on the healthier side and have
lower-than-average risk scores, generating less risk-adjusted revenue than what
an HMO or PPO typically receives. "By definition you're going to get
better selective risk with an MSA, but that doesn't mean you're not going to
have catastrophic burden," Handlan adds.
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