Zero Cost PPO Alternative for Seniors
Is there a better way for the 16,000 Californians who turn 65 every month to afford their health care cost?
Will today's economic recession impede seniors from getting the important coverage they deserve? Medicare was signed into law on July 30, 1965 by Lyndon B. Johnson, as part of his Great Society. Today, seniors live longer and healthier lives. Most seniors purchase a Medicare Supplement plan to cover the deductibles and co-insurance that Medicare does not pay for. As health care evolved, prescription drug therapy became an important tool in combating disease and keeping people alive. Unfortunately, many seniors could not afford the drugs they needed and had to make choices between basic necessities and their prescriptions. As a result, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which went into effect on January 1, 2006. Many insurance carriers offer various part 'D' plans ranging in price from $25 to $100 per month. The most popular Medicare Supplement, Plan F, costs about $155 per month. Add both Part D premium and the $100 that most seniors pay for their Medicare Part B, their total monthly expenditure is about $300.
Medicare Advantage Programs: Are they all HMO's?
In today's tough economic times it's no surprise that one out of four seniors are enrolled in a Medicare Advantaged (MA) product. With a MA product seniors actually assign their Medicare over to the insurance carrier. The carrier is compensated by Medicare as the Center for Medicare Medicaid Services (CMS) now pays the carrier in lieu of the doctors and hospitals for health claims. Most Medicare advantaged programs are free or negligible in price, as the bulk of money comes from the government. The senior partakes in lower co-pays and deductibles than he or she would have by Medicare alone. MA products are not supplements to Medicare, but the senior does reduce his or her cost sharing as they would if they purchased a supplement. Most MA products are HMO's. Scan, Secure Horizons, Blue Cross, Blue Shield are among the plethora of available plans. They provide an invaluable service for those who can't afford to pay premiums monthly. Most MA products are MAPD or Medicare Advantaged Prescription Drug plans as prescription, Part 'D' is all inclusive. Part D coverage is covered in three phases:
- Initial. First $2,830 (for 2010) of combined drug cost, payment from both the insured and the carrier.
- Coverage Gap or 'Doughnut Hole' between $2,830 and $4,550. Some Part D and/or MA plans will pay for prescriptions during this phase; others won't. Some carriers offer plans with generic coverage only inside of the doughnut hole.
- Catastrophic coverage after total drug cost reaches $4,550. TROOP - TRue Out Of Pocket cost, which is your own cost. Keep in mind that the carrier pays approximately 2/3 and the insured pays 1/3 by the time the 'doughnut hole' is reached.
Although Part D isn't free, it is heavily subsidized by the tax payers. To help defray the cost of those who use prescriptions, the government tries to sway those who don't use prescriptions to enroll in a Part D program too. This is done by penalizing late enrollees by 1% of the average part D premium nationwide each month that they don't enroll. In today's tough economic times many people who would not consider a Medicare Advantage Product are taking a fresh look, and new products are there to entice them. The problem with HMO's is that many seniors will not consider changing their doctors. If they are lucky enough to have their primary care doctor participate in an HMO they still have to deal with the obstacle course of getting authorization for specialty referrals and procedures. Many healthy seniors don't have relationships with cardiologists, but want to know that if symptoms manifest they can have access to a specialist beyond their medical group. A limited number of carriers are introducing MAPD plans that are PPO's. Like a traditional MAPD plan, their premium is either nothing or close to nothing, but members have the freedom to go directly to any provider within a large network or even step out of the network for a little more cost sharing.
Why wouldn't everyone enroll in a PPO that is MAPD?
Enrollment in these plans is only available during certain times of the year. The two major windows are Annual Election Period (AEP) from November 15th through December 31st for a January 1st effective date and Open Enrollment Period (OEP) between January 1st and March 31st. OEP is only available to those who already have a Part D plan or another Medicare Advantaged Product. In life, one size never fits all. Generally these plans will cost more money when obtaining services at the doctor. For example, Freedom Blue from Anthem Blue Cross offers such a Plan for either zero cost or $31 monthly. The inclusive prescription coverage would cost over $78 monthly if you were to purchase a stand alone Part D plan. Although the $500 deductible doesn't apply for regular office visits, it does apply for most other services, as well as other co-payments for hospitals and other services. For those who can't afford any cost sharing, an HMO is probably better. On the other hand, a traditional Supplement and Part D plan might make more sense for those who don't need to take premiums into consideration. For those in the middle, a MAPD PPO plan might be an alternative worth investigating.
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