Medicare Part C – Overview, History, and 2011 Changes

Overview

Medicare Part C, most commonly known as the Medical Advantage (MA) program, is different from parts A and B in that it describes coverage offered by independent, private health insurance companies. These insurance carriers are approved by Medicare to administer Medicare Part A and Part B coverage. One advantage to these programs is that they generally offer additional coverage that standard Parts A and B don’t offer, such as vision, hearing, dental, and/or health and wellness programs. Most also include prescription drug coverage. Additional monthly premiums may be charged for these additional benefits that original Medicare doesn’t offer.

History

Original Medicare, which came into being in 1965, at first consisted of only two parts – Part A and Part B. Part A primarily concerned hospitalization, and the optional Part B primarily related to doctors and regular medical care such as doctors’ bills, x-rays, and lab tests. Part B was a fee-for-service plan, with participants choosing their own Medicare-affiliated doctors and specialists.

In 1997, the Balanced Budget Act named Medicare’s managed care program “Medicare + Choice.”  It obtained its current name, “Medicare Advantage” with the Medicare Modernization Act (MMA) of 2003. At that time, certain rules were changed to give Part C enrollees better benefits and lower costs. The Medicare Part D prescription plan was also initiated as part of the MMA.

Over the years, Medicare’s focus has shifted to expanding these privately administered programs and providing extra benefits to participants of Medicare Advantage programs. The 2010 Healthcare Reform Law shifted some of that focus by gradually reducing federal payments to Medicare Advantage plans. It is thought that this will serve to bring them more in line with the average charges of fee-for-service providers.

Companies offering Medicare Advantage plans receive a fixed amount every month to pay for your medical care. In exchange, these companies must follow rules set down by Medicare. How participants receive services and the amount of out-of-pocket costs each Medicare Advantage Plan can charge differ from provider to provider. Examples of these costs and services include whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency and non-urgent care. The amounts of your deductibles, copayments, and coinsurance are also set by the plan each year. Depending on the levels established, you may find yourself paying more or sometimes less than you would have paid under the original Medicare program.

Changes for 2011:

¨      Medicare Advantage plans can’t charge you more than Original Medicare for certain services like chemotherapy, dialysis, and skilled nursing facility care.

¨      Medicare Advantage plans must cover all of the services that Original Medicare covers except hospice care.

¨      There will be an annual cap on how much you pay for Part A and Part B services during the year. For 2011, this cap is set at $6,700. This annual maximum can change depending on which Medicare Advantage plan a participant belongs to.

¨      If you join a clinical research study, your costs may be lower and some costs may be covered by your plan.

 

 

 

Sources used for this article:

http://www.kff.org/medicare/upload/2052-15.pdf

http://www.medicare.org/medicare-basics/part-c.html#what%20is%20part%20c

 

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