Medicare Advantage Plans
Medicare Advantage (MA) plans are Medicare plans offered by private insurance companies. These plans must have all basic benefits from Medicare Parts A and B, except hospice care. Medicare pays a set amount to the MA plan for each member.
In 2009, 84% of MA plan enrollees also included private prescription drug coverage. Most private MA plans limit your provider choice more than a regular Medicare plan does. It is not possible to use supplemental insurance if you join an MA plan. However, the extra MA benefits are like supplemental insurance. The most common MA benefit for enrollees is paying less for services. Some MA plans also offer:
- Improved Part D benefit
- Reduced Part B and D premiums
Private insurance companies that offer MA plans can change these extra benefits every year.
Currently, Medicare pays MA plans an average 14% or $103 more per month per member than it pays for those in traditional Medicare plans A and B. The Affordable Care Act saves money by reducing this extra amount it spends on MA enrollees. By 2017 Medicare will spend about the same on everyone.
Doing this is important because this extra cost affects everyone. It is paid for by higher Medicare premiums and by taking money out of the Medicare Trust Fund.
The ACA also changes the way it pays MA plans to improve the care you get. Medicare will now provide bonus payments to MA plans that show high quality care results.
Despite these payment changes, none of your guaranteed Medicare benefits will be cut. You continue to have access to all of your government promised health care benefits. However, MA plans that chose to offer extra benefits like eyeglass or dental coverage may make changes. Because these benefits were the plans' choice, they may choose to stop offering them. If they do this they are required to let you know.