May 7, 2019 By vericred
We’ve made it our mission to enable technology
companies to build innovative solutions that bring transparency, efficiency and
decision support to the health insurance and employee benefits spaces. Earlier
this week we launched our Medicare Advantage Rating
API, which will now allow InsurTech and digital healthplatforms to deliver plan
search, quoting and other features to seniors, employers and brokers in the
flourishing over-65 market.
Using Vericred as their data foundation,
technology companies including online brokers can use the new API to build
Medicare Advantage solutions to better support the 22 million Americans now
enrolled in Medicare Advantage plans. Let’s dive in to better understand
Medicare Advantage basics and why these plans are increasingly popular.
Medicare Advantage — also known as Medicare Part C —
is a privately administrated type of Medicare, which is the United States
government’s federal health insurance program for Americans age 65 and older
and younger people meeting certain criteria.
Traditional Medicare consists of two parts:
·
Part
A – Hospital
Insurance: Most beneficiaries are eligible for Part A premium-free, which
covers inpatient hospital stays, care in a nursing facility and hospice
services.
·
Part
B – Medical
Insurance: Part B covers outpatient medical care, such as preventive services,
doctors’ visits, laboratory and diagnostic tests, vaccinations and outpatient
procedures. The premium for Part B is $135.50 monthly for most people, but
those in higher income brackets pay as much as $460.50 per month.
Enacted as part of the Medicare Modernization
Act of 2003, Part D adds coverage for self-administered
prescription drugs. Part D plans can be purchased to supplement Original
Medicare (Parts A and B) or bundled into a Medicare Advantage Plan.
What is Medicare Advantage (Medicare Part C)?
Medicare Advantage is a program in which
individuals who qualify for Medicare can enroll in alternative, certified
health plans offered by private insurance companies instead of
the government-run Original Medicare plan (Part A + Part B). These plans
include Part A, Part B, and usually Part D.
What services do Medicare Advantage plans
cover?
Medicare Advantage plans are regulated by the
Centers for Medicare and Medicaid Services (CMS) and must cover all of the
services — except hospice — that Medicare Parts A and B cover. In
addition, many Medicare Advantage plans also cover benefits not included in
Original Medicare, such as vision, hearing and dental coverage, in-home support,
wellness programs, and other supplemental services.
How does Medicare Advantage work?
The U.S. government (Medicare) pays the
private insurance carrier offering the Medicare Advantage plan a fixed monthly
fee for each enrolled member. Members are then provided coverage through the
private carrier rather than through the government. Unlike with Original
Medicare, which permits members to visit any healthcare provider who accepts
Medicare, Medicare Advantage enrollees may be limited only to doctors, specialists
and hospitals within their private insurance carrier’s provider network.
How much do enrollees pay?
Most Medicare Advantage beneficiaries pay
monthly premiums to their private insurance carrier that vary depending on the
specific plan in which they’re enrolled. These premiums can range from just a
few dollars to hundreds of dollars per month. Some “zero premium” plans do not
require members to pay a separate Medicare Advantage premium at all, but
nevertheless these plans are not free, as enrollees must continue to pay the
$135.50 (or more) Part B premium. Some Medicare Advantage plans go even further
and pay some or all of the Part B premium, reducing the amount the beneficiary
pays to the government each month for Medicare coverage. According to CMS, the
average monthly Medicare Advantage premium (not including Part B) is $28, a six
percent decrease compared with 2018.
In addition to premiums, beneficiaries are
also responsible for paying a portion of the healthcare costs they incur. Under
Original Medicare, enrollees are responsible for paying 20% of the costs of
most services and have no out-of-pocket limit. Medicare Advantage plans,
however, often charge members a set dollar amount — instead of a fixed percent
— for most services and have an annual out-of-pocket maximum, after which
the insurance carrier will pay for all covered costs.
Why is Medicare Advantage becoming more
popular?
By providing supplemental, flexible benefits,
and low premiums, Medicare Advantage plans have proven attractive to Medicare
enrollees. According to CMS, the number of Medicare Advantage enrollees
nationwide has expanded this year to an all-time high of about 22 million, a 32
percent increase since 2015. This represents about 36 percent of all Medicare
beneficiaries.
Up Next: VeriStat series on Medicare Advantage plans and benefits
As we’ve explored above, Medicare Advantage is
an expanding, popular and diverse alternative to Original Medicare, albeit with
a different cost-sharing structure and wide-ranging benefits. Next, our VeriStat series jumps into deeper analysis to
further investigate the intricate Medicare Advantage market and its various
plan designs.
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