There are many differences between Medicare Advantage plans today and those offered a decade ago. It would seem that in this economy we are looking for options for savings on healthcare. However, the changes that have occurred with Medicare Advantage plans are also changing how these plans are organized and funded.For some seniors, it is not enough to just have healthcare coverage. They want to get better value for their money. There are several ways to accomplish this. The current changing trends with managed care and cost sharing will likely impact both types of plans.
Traditional Fee-For-Service plans have been the way most Americans receive care for years. In reality, they are the status quo and not likely to change in the near future. Traditional fee-for-service plans are backed by the government through Medicare Part A.Traditional fee-for-service plans have been in place for decades and haven’t really changed much. With increased costs and tight budgets, many senior citizens find themselves making monthly payments for their medical bills. Unfortunately, this is the case for all Americans and will likely remain the same until Medicare Part A is dismantled.
Under the current proposal by the Obama Administration, there is a growing number of plans being offered through Medicare Part A called “managed care.” Medicare Advantage plans are also being offered through this type of managed care arrangement. How can they change the structure of these plans?The answer lies in the difference between managed care and fee-for-service plans. Under managed care, the entire cost of medical services are divided among a group of doctors and hospitals. In return, the Medicare Advantage plans will be reimbursed by the federal government. If the doctor’bills are too high, the plan will reduce them or refuse payment altogether.
Medicare Advantage plans are a bit different. Some of them may provide very attractive payouts for insured clients but the federal government still plays a large role in funding them. Any savings are not actually from the doctor or hospital but from the government. Many consider it a kind of co-payment.Although cost sharing and health maintenance organizations (HMOs) have been in place since 1965, more people are no longer comfortable with the current fee-for-service structure. If the government decides to force an overhaul, they could eliminate much of the traditional fee-for-service structure and replace it with something else. This could mean a significant change in the way Medicare Advantage plans work.
Independent insurance agents claim that HMOs in particular will have an impact on the future of managed care. In their eyes, Medicare Advantage plans will be forced to offer much lower rates for their enrollees. As a result, only those with the best insurance rates will continue to receive their Medicare Advantage benefits.Managed care and fee-for-service may not be stable. However, the growing trend towards alternative and comprehensive health insurance plans that do not include traditional fee-for-service coverage might shift the balance of power back towards Medicare Advantage plans. Most Americans, however, don’t even know what an Advantage plan is. This is changing as each year new plans are being introduced. Compare Medicare Advantage plans in 2021
With more competition, the current marketplace will likely become more lucrative for consumers. Whether or not health insurance reform is passed, remains to be seen. Without government assistance, there is a very real possibility that Americans could end up paying significantly more for their medical services in the near future. Whatever path is taken, Medicare Advantage plans will be a major focus in the coming years. Future plans could lead to what can only be described as a “cashless society.” This does not mean that everyone will be able to pay their bills right away but that access to healthcare will be greatly impacted in the future. as most families begin to realize the rising costs of paying for health insurance.