Medicare MAPD: Loved by seniors, but will it endure?
Harry Truman started the process of establishing a National Health Plan when he asked Congress in 1945 to pass laws. 20 years later, he was the first to sign up under Medicare’s newly enacted law which Lyndon Johnson signed to. The dangers of “socialized medicine” have been debated for 2 decades, and now the US approved the first beneficiaries of Medicare, a program for seniors over 65 or the disabled, and Medicaid, the plan for the needy.
Medicare design focused on two levels of care. Medicare Part A includes hospitals, hospice, nursing, and home care. Part A is cost-free, but most of those who are eligible paid for it during their working hours through Medicare taxes. Medicare Part B covers home health services, medical services, outpatient services, durable medical equipment, and other medical services. Medicare Part B demands a premium that was $ 3 in 1965 and now stands at almost $100 a month. Find a Blue Cross Advantage plan here https://www.medicareadvantage2019.org/bcbs-medicare-advantage-plans-for-2019
Such claims paid by Original Medicare account for approximately 70% of the total amount submitted by a vendor. Today’s rule of thumb is that Medicare approves 80% of the fees submitted. Of this 80%, Medicare pays another 80%. This amount, for the Medicare member, is approximately 65% of the bill. It is the member’s responsibility to pay for the remaining 35%. There is NO cap on what might be owed. Bankers Life’s first Medigap or Medicare supplement plans were offered in the early 1970s with potential multi thousands of dollars liability to a Medicare beneficiary. The plans covered the additional costs that Medicare A and B will not cover. The Medigap approach was widely accepted by members of the public and soon hundreds of companies offered their own versions of Medicare supplement policies.
Abuses on the market among the agents are “replacing” their own cover on the basis of a better or improved plan or unnecessary sale of elderly seniors to receive a new commission, and in 1992, this led to the unification of Medigap guidelines by the federal government Several policies were banned and all policies offered were standardized. An example is that if a senior enrolls for a plan “F” from company A, that plan would be exactly like a plan “F” from another company B. The buyer only needs to consider the price and service they were expecting but do not need to worry about the different services. This change brought to an end the problem with thousands of plan decisions being made.
Cost shifting, these additional costs, which are not covered by Medicare, have increased prices for Medigap plans. Over time, Medicare reduced the amount that they reimbursed providers, doctors, hospitals, and so on. This meant that the Medigap policy had to pay these new fees, resulting in increased premiums to cover the shifting costs. The seniors had the effect that their plans became more expensive. Many fixed income retirees felt the economic pressure and cancelled their cover. The irony was, at a time in life when they needed insurance the most, they would have none.