Medicare Private Plans Subject to New Requirements

The Obama Administration will impose new requirements on sponsors of Medicare private plans (also known as Medicare Advantage or MA plans), according to the final 2010 Call Letter released on March 30, 2009, by the Centers for Medicare & Medicaid Services (CMS).

Specifically, the agency seeks to curb the number of private plan options by no longer allowing Medicare Advantage sponsors to offer multiple plans with minor differences in the same regions and by eliminating some plans with histories of low enrollment. CMS’s goal is to help simplify choices for people with Medicare and help them enroll in plans that provide them with the best benefits to match their needs.

According to CMS, one MA sponsor should not offer more than three MA plans by plan type (such as HMOs and PPOs) in one market area, and each plan must be distinguishable from other offerings by the same organization. Some of the differences CMS considers sufficient to distinguish one plan from another are plans with or without specific supplemental benefit options, plans with or without Part D benefits, and different plan types.

In addition, CMS seeks to make out-of-pocket costs for people with Medicare more predictable by limiting cost-sharing for certain services—such as renal dialysis, psychiatric hospitalization, chemotherapy and other Part B drugs, home health services and skilled nursing facility services—to amounts equal to those under Original Medicare. Furthermore, CMS encourages plans to establish out-of-pocket maximum limits. Plans without out-of-pocket limits or with limits that exceed $3,400 will be subject to greater scrutiny by CMS to ensure that these plans are not discriminating against high-cost, sicker enrollees.

-Adapted from “ Medicare Private Plans Subject To New Requirements”, MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center, Vol. 12 , No. 7: April 7, 2009.

 

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