The New Medicare

THE NEW MEDICARE

Medicare + Choice is the term used to describe the changes Congress made to Medicare in the Balanced Budget Act of 1997. Congress hopes these changes will give Medicare beneficiaries more insurance coverage options and at the same time encourage cost savings and efficiency in the Medicare system. The following article outlines new options available to Medicare beneficiaries.

NEW BENEFITS

Medicare + Choice includes new wellness promotion health benefits.


OPTIONS

Medicare is the national health insurance program for people 65 and older; certain younger disabled people and people with permanent kidney failure. Medicare + Choice beneficiaries from Massachusetts may choose from the Medicare Plans that are highlighted in this story. Some of the choices are already available now while others will not be available for some years. Elders should be aware that they DO NOT have to change insurance coverage if they are happy with the traditional Medicare program.


GLOSSARY

Coinsurance: The portion or percentage of the Medicare-approved amount that a beneficiary is responsible for paying.

Co-Payments: For managed care recipients, a standard fee paid every time a person visits a doctor or buys a prescription.

Deductible: The amount a beneficiary must pay before health insurance begins payment for covered services.

Premium: A monthly payment made to a health insurance company or Medicare to receive medical coverage.


ORIGINAL MEDICARE

The traditional Medicare A & B plans are still available nationwide. Medicare A helps pay for care in a hospital, skilled nursing facility, some home health care, and hospice care. For an additional monthly premium that increases every year, people can receive Medicare Part B. Part B helps pay for doctor bills, outpatient hospital care and other medical services not covered by Part A. There are several deductibles and coinsurance recipients must pay when they receive services. For more details see: "Guide to Health Insurance for People with Medicare" on the FH2 Resource Wall.

1999 DEDUCTABLES & COINSURANCE

INPATIENT HOSPITAL INSURANCE PART A


MEDICARE WITH MEDIGAP

Medigap is supplemental insurance designed to pay for some of the out-of-pocket expenses not covered by Medicare. Depending on the policy, Medigap may pay for skilled nursing coinsurance, foreign travel emergency coverage and/or deductibles.

PRIVATE FEE-FOR-SERVICE PLAN PFFS

People choose hospitals and physicians freely to receive traditional Medicare coverage with this plan. The PFFS decides how much to pay the providers for the covered services and the Medicare recipient pays the difference of what is covered. So far insurance companies in Massachusetts have not stepped forward to offer this coverage.

MEDICAL SAVINGS ACCOUNT MSA

This is an experimental option for a limited number of people starting in 2001. It is unclear at this time if Massachusetts insurance companies will decide to offer it. Medicare pays the premium for health insurance policies with high deductibles and also deposits money into a tax-free MSA every year. The money accumulates yearly to pay for deductibles and other medical costs not covered by the health insurance policy. If enrollees need little care in the early stages of the MSA, they will come out ahead. If they need a lot of care and they have to use all the money in the MSA, the beneficiary must pay the rest of the medical bill out of their own pocket. Seniors who choose this option must be enrolled for a full year and may only enroll during November.


MANAGED CARE PLANS

This is a Medicare approved network of health care providers that agree to give care in return for a set monthly payment from Medicare. A managed care plan may be any of the following:

Health Maintenance Organization (HMO): It offers health and insurance and health care. A primary care physician (PCP) manages the care of the individual and provides referrals to specialist. The choice of a PCP is limited to physicians and hospitals in the HMO network. If recipients stay within the HMO network the Medicare HMO recipient has little or no out-of-pocket costs for covered services.

Point of Service Option POS: This is offered by some HMOs. A POS allows its members to get care outside the HMO network for higher co-payments.

Provider Sponsored Organization PSO: It is a group of physicians and hospitals that belong to a network and give medical care to its recipients. The difference between an HMO and a PSO is that network members manage the costs, not the insurer. If recipients stay within the PSO network the recipient has little or no out-of-pocket costs for covered services.

Preferred Provider Organization PPO: Doctors and hospitals form a network that contract with an insurer to provide care to enrollees at a discount. This plan allows for a broader choice of healthcare providers than most HMOs and PSOs by charging an extra fee for those who choose a provider outside the PPO.


MORE INFORMATION

Health insurance information, counseling and assistance are available through the Senior Health Insurance News and Education (SHINE) Counseling Program by calling 800-882-2003 or 617-727-7750 (TTY 800-872-0166). A fact sheet listing the Massachusetts insurance providers offering Medicare + Choice policies is available on the FH2 Resource Wall. Call 6-8182 if you would like a copy mailed to you.

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