Medicare Advantage Holders Forced To Medigap

On Tuesday, CBO director Douglas Elmendorf told Sen. Baucus’ committee that its plan to cut $123 billion from Medicare Advantage would cost some 2.7 million people to lose this coverage altogether and result in lower benefits for the rest. The program will become so unattractive that people will quit buying the policies in the future.

The fact is that if you like your current coverage, you’re out of luck.

In recent years, over 10 million beneficiaries, or more than 20 percent of those on Medicare, have chosen private Medicare Advantage health plans over the government’s traditional fee-for-service program.

About 660,000 people nationwide – or 7 percent of Medicare Advantage enrollees – are in plans that are set to close. Between now and Jan. 1, they can switch to another private plan or join Medicare’s traditional fee-for-service program.

Medicare Advantage enrollees who do nothing and remain in the same plan in 2010 will see their monthly premiums increase an average of 32 percent, according to an analysis by the Kaiser Family Foundation.

In addition, seniors will have fewer “zero-premium” plans next year.

According to the Baltimore Examiner, The AARP stands to win big on the current reform plan.

The 2008 AARP financial statement shows the group received nearly $653 million in royalties from private insurance companies that sold products referred by AARP in 2008, while taking in $249 million in membership dues.

Seniors have basically two choices for Medicare supplemental insurance, the first one is a government run supplement called “Medicare Advantage,” the second one is called “Medigap” insurance and is sold by private insurance companies. This medigap is what the AARP endorses, and gets royalties on.

Section 1161 of the House bill would slash payments to Medicare Advantage health plans used by 20 percent of seniors and cause them to lose some benefits, including vision and dental coverage, thus forcing them into the private insurance supplements such as AARP offers.

The good news, if there is any, is that seniors now have an alternative to the AARP.

Association of Mature Americans Citizens offers all the benefits of an AARP membership. AMAC offers discounts and medical insurance.

AMAC memberships are only $12.50, per year, for the whole family.

photo credit: Esthr