Medicare Benefits - Part C

Medicare Part C, formerly and better known as "Medicare+Choice," is now known as "Medicare Advantage". If you are entitled to Medicare Part A and enrolled in Part B, you are eligible to switch to a Medicare Advantage plan, provided you reside in the plan's service area as an alternative to coverage under original Medicare Parts A and B. Medicare Part C has the potential for saving some federal and postal retirees, and surviving spouses, real money.

Part C governs the way Medicare benefits are provided by companies that contract with the Medicare program. If you have Medicare and enroll in a Medicare Advantage plan you generally get all of your medical services through that plan.

About Medicare Part C

Medicare Advantage attempts to incorporate the cost-saving measures of "managed care" in a new manner that may take the form of an health maintenance organization, preferred provider organization, health savings accounts or other new variations of traditional health plans. Medicare Advantage managed care plans may have some out-of-pocket, but they do generally save some of the out-of-pocket costs traditionally associated with original Medicare Parts A and B.  Like private insurance, Health Maintenance Organizations (HMO's) and Preferred Provider Organizations (PPOs) are types of coverage you can choose from.  These organizations contract with Medicare to provide Medicare benefits in a managed care setting. Private Fee for Service plans (PFFS) and Medical Savings Accounts (MSAs) can contract with Medicare to provide Part A and B benefits through an insurance program.

Medicare Advantage includes new incentives for healthcare organizations to participate in the Medicare managed care program and for beneficiaries to sign up for a private plan, while at the same time instituting bidding processes designed to help control the rising cost of the Medicare program. Organizations will be able to offer a wider variety of health plans. In addition, the now available plans can cater for special needs beneficiaries, those with particularly complex conditions that require many healthcare resources to treat.  The reform of Medicare Part C is also designed to provide beneficiaries, especially in rural areas, with more choices of private plans.

Medicare Advantage health plans are reimbursed by the Centers for Medicare and Medicaid Services for each person who enrolls in their plan. Once enrolled in a Medicare Advantage health plan, there are generally not claims to file or bills to submit directly to Medicare. Remember, Medicare has already paid the Medicare Advantage health plan for your care.

Because of the fact that Medicare reimburses the Medicare Advantage health plan directly for each enrollee, the monthly premiums for such plans are either $0 or very low.

So, if you are entitled to Medicare Part A, which for most people is premium-free, and you are already are paying for Medicare Part B, it makes sense to at least explore a Medicare Advantage plan available in your area. Medicare Advantage plans are highly regional, they can offer a plan in one county, but not in the next county. You need to find out which plan's service your area.

These plans are generally well advertised, and usually offer a very low monthly premium or no monthly premium at all ($0 dollars). By the way, these plans are paid a per-person fee by the government, which is why the monthly premium is low or non-existent. However, they all require that you be enrolled in both Parts A and B -- which means payment of the monthly Part B premium. And most, do include a prescription drug benefit.

Who Might Benefit from this Plan

Who might benefit from enrollment in a Medicare Part C health plan?

• those who need the flexibility of a POS or a PPO;

• Those who want the savings offered when enrolling in a HMO;

• federal and postal retirees who are medicare-eligible, and who did not continue FEHB coverage into retirement;

• federal and postal retirees who are medicare-eligible, and who are not able to enroll in any FEHB health plan during any Open Season;

• federal and postal retirees who are medicare-eligible, and whose monthly retirement income is all but eaten up by the cost of their current health insurance premiums; some may find that they can benefit by "suspending" their current FEHB coverage and enrolling in a Medicare Advantage health plan; thereby saving one premium a month; by "suspending" their FEHB coverage, they could find themselves paying only the Medicare Part B monthly ($93.50 in 2007)

One advantage is that PFFS plans have the option of including the new Part D benefit while in MSA plans, that options does not exist. People enrolling in one of those plans without Part D benefits would need to buy separate coverage for that benefit.

Medicare Advantage Options

Current Medicare Advantage options:

• Coordinated Care Plans;
  • HMO plans, also called Health Maintenance Organization plans, emphasize preventive care but only for services within the HMO network. T
  • POS plans, otherwise known as Point of Service Plans, offer services outside of a preferred network but also make available a network of preferred providers at a reduced rate, like HMO plans, They typically require a referral from a network primary care physician to access a network specialist; they sometimes offer drug benefits.
  • Regionally Expanded Preferred Provider Organization (PPO) plans are similar to POS plans but have broader geographic access to network providers in a larger service area, and with reduced benefits outside the PPO network. They do not typically require a referral from a network primary care physician to access network specialists.
  • PSO plans, which stands for Provider-Sponsored Organizations, are similar to the POS plans but are usually organized with physicians that practice in a regional or community hospital. There may or may not be coverage for providers or facilities outside the PSO network, depending upon the plan designs offered. They may require a referral from a network primary care physician to access network specialists.
• Medical Savings Accounts set up in conjunction with private fee-for-service plans providing:
  • at least the same benefit coverage levels as Medicare Parts A and B; or
  • high deductible coverage.

Medicare Advantage and Medicare Part D

On January 28, 2005, CMS published two final rules, implementing the revised Medicare Part C (the newly named Medicare Advantage program) and the new Medicare Part D (the prescription drug benefit).

The new Medicare Part D will extend a voluntary prescription drug benefit to seniors who are enrolled in traditional fee-for-service Medicare. It also will encourage employers who are currently offering prescription drug coverage to retirees to continue to offer that coverage. Beneficiaries will be able to enroll in either type of plan when the annual enrollment period starts on November 15, 2005; open enrollment will continue until May 16, 2006.

Enrollment Period

Online Enrollment will be available beginning November 15, 2006

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B before you can get Part C. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.

All Medicare Advantage plans require that you be entitled to Medicare Part A, and be enrolled in Medicare Part B, for which you will pay a monthly premium. In 2007, the Medicare Part B monthly premium is $93.50. Most people, including federal and postal retirees, get Medicare Part A automatically when they turn 65, and pay no monthly premium because they've already paid Medicare taxes while working.

Medicare Advantage Plans in Your Area

Call 1-800-MEDICARE or visit www.cms.hhs.gov/healthplans/rates/default.asp to determine what your plan choices are in your area.