by Kristin Steenson | Jul 14, 2017
Effective January 1, 2019,
federal legislation requires all health care payers offering Medicare Cost
plans to discontinue plans in service areas where at least two competing
Medicare Advantage plans meeting specific enrollment thresholds are available.
Below we outline what Medicare Cost Plans are, and how sun-setting these
plans may impact the Medicare market.
What are Medicare Cost Plans?
Medicare Cost Plans are operated by an HMO (Health Maintenance
Organization), and are not Medicare Advantage plans. Major differences
between Medicare Cost Plans and Medicare Advantage plans include:
·
Individuals may enroll in Cost Plans whether they have Medicare
Part A and Part B, or Part B only. Medicare Advantage requires enrollment
in both Parts A and B.
·
Enrollees can receive covered Medicare services from providers
outside of the plan’s network.
·
Cost Plans may include prescription drug coverage. For
plans that do not include drug coverage, Cost Plan enrollees may enroll in a
Part D plan.
·
Individuals can enroll at any time the Cost Plan is accepting
new members.
·
Individuals can leave Cost Plans at any time and return to
Original Medicare.
Medicare Cost Plan Sunset
Under the Social Security Act (section 1876 (h)(5)), CMS will
not accept new Cost Plan contracts. Additionally, CMS will not renew Cost
Plans contracts in service areas where at least two competing Medicare
Advantage plans meeting specified enrollment thresholds are available.
Enrollment requirements are assessed over the course of a year. In
2016, CMS began issuing notices of non-renewal to Cost Plans impacted by
competition requirements. Medicare Access and CHIP Reauthorization Act of
2015 (MACRA) provided affected Cost Plans a two-year period to transition to
Medicare Advantage. This allows impacted Cost Plans to continue to be
offered until the end of 2018, but only if the organization converts into a
Medicare Advantage plan. Existing Cost Plans that have been renewed
may submit applications to CMS to expand service areas.
Impact on the Market
As of June 2017, there are approximately 700,000 Cost Plan
enrollees across the nation. Almost 400,000 of these enrollees reside
in Minnesota, with nearly 180,000 of these individuals in the Twin Cities
region. If the Cost Plan enrollee is eligible for Medicare Advantage, the
individual may elect to enroll in the Medicare Advantage plan the Cost Plan
converts into. The beneficiary does have the option to discontinue
or change the Medicare Advantage plan after the deemed enrollment.
We will continue to monitor Cost Plan news and post updates
as they become available.
Sources:
Medicare Part C Division of Policy, Analysis, and Planning
(DPAP) – https://dpap.lmi.org/DPAPMailbox/Documents/FAQs_August%202016.pdf
H.R.2 – Medicare Access and CHIP Reauthorization Act of 2015
– https://www.congress.gov/bill/114th-congress/house-bill/2
No comments:
Post a Comment