Medicare is a socialized insurance program that is funded by the Federal Government and was first established during the 1960’s. Originally, Medicare included two Parts, Part A and Part B, and was both funded and administered over solely by the Government. However, beginning in 1997, a new part of Medicare was added that allowed those on Medicare to opt to use a private insurance plan, instead of the traditional federally run plans. These plans are called Medicare Advantage Plans and are under Part C of Medicare Benefits.
What Are Medicare Advantage Plans?
The idea behind Medicare Advantage Plans is that the actual plan itself is run by private insurance companies. The plans are still funded by the Federal Government, but are actually administered over by the private health industry. Medicare Advantage(MA) Plans, were added onto Medicare as part of the Balanced Budget Act of 1997 and in 2003, Prescription Drug Coverage was added as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
Like traditional Medicare Plans, such as Part A Benefits, the insured usually has to pay a premium when using an MA plan. MA plans are also required to cover anything that regular Medicare would, but are given a good deal of leeway in how they implement their insurance program. So, for example, an MMA plan is required to help cover the cost of a doctors visit, but they may require a higher co-pay than traditional Medicare.
Many Medicare Advantage Plans will also cover some things that traditional Medicare does not, in an effort for the Private Insurance Companies to get people to use their programs.
Dangers of Using Medicare Advantage Plans
Since the private insurance companies run MA plans and are allowed to make some changes to what they charge or how they cover certain things, it is important to be very careful when choosing a plan. It is important to compare the benefits and costs of the plans to traditional Medicare, taking into account the needs of the insured. It is also important to compare the different Medicare Advantage Plans available, as they can differ too.
Again, because MA Plans are run by Private Insurance instead of the Government, many patients find that they have difficulty getting items covered and must fight the insurance companies, who are, after-all, out to make a profit. Each year, a great deal of those who signed up for MA plans, wooed by the extra perks, like dental coverage, decide to switch to the Federally run programs, with about a third of these people citing problems getting coverage through the private insurance companies.
Cost to the Taxpayers
In addition to many finding that the for-profit Medicare Advantage Plans do not provide adequate coverage and making claims is often met with resistance from the private insurance industry, these plans are also much more expensive to the taxpayers.
On average during 2005, these plans cost the taxpayers about 12.5% more than traditional Medicare, with the private insurance companies usually earning at least 6% profit.
When you take into account the fact that so many people are dissatisfied with MA plans and the added cost to tax payers, it makes it very hard to support allowing Private Insurance to become involved with Medicare. However, as can be seen from the current health care debate, Private Insurance Lobbyists have a very deep hold on the Senate and the President.