Medicare is the federal health insurance program for people who are age 65 and older, and for certain individuals with disabilities. Medicare Part A covers inpatient hospital stays, while Part B covers doctor services. Medicare Part C refers to Medicare Advantage plans offered by private companies, and Medicare Part D offers prescription drug coverage. Medicare beneficiaries can stay in the traditional federal program, and purchase supplemental policies from insurance carriers. In some parts of the country, older adults have the option to enroll in Medicare Cost plans offered by private companies. In Minnesota, about 392,000 beneficiaries have elected to receive coverage through a private health plan, with many enrolling in Medicare Cost plans, and others signing up for Medicare Advantage plans.
The distinction between the two types of Medicare health plans makes a big difference to insurance companies because it governs how they get paid. The federal Affordable Care Act, in particular, has been phasing in payment reductions to Medicare Advantage plans in hopes of bringing costs more in-line with those under the traditional Medicare program. Minneapolis-based UCare, a Medicare Advantage plan carrier, has closed their health plans called Classic and Value Plus in 43 counties across western Minnesota, due to shrinking reimbursements from Medicare. UCare continued to offer two Medicare Advantage health plan options in western Minnesota and western Wisconsin for 2015. In the Twin Cities metro area and eastern Minnesota, the company has four health plan options. Insurers with Medicare Advantage customers have been critical of payment reductions in the federal health law, saying they will cause consumer disruptions as carriers flee the market. However, a report in October 2014 from researchers at the Kaiser Family Foundation suggested the number of Medicare Advantage plans across the country has declined only slightly. In Minnesota, the tally grew from 32 in 2014 to 33 in 2015. Since 2010, enrollment has far exceeded expectations, increasing by nearly 5 million beneficiaries, continuing a steady upward climb that started a decade ago. Between 2010 and 2014, the total number of plans has declined modestly, but beneficiaries in 2014 still had the option to choose among 18 Medicare Advantage plans, on average.
In 2014, a total of 471,211 Americans in 15 states and the District of Columbia have Medicare Cost plans, according to the Kaiser Family Foundation. That is significantly less than the 15.7 million Americans enrolled in Medicare Advantage plans. Looking at what is available in 2015, Medicare Cost plans account for approximately 10 percent of the roughly 44,100 health insurance plans available to those 65 and older. Overall, Minnesota has the nation’s largest concentration of people with Medicare Cost plans. An estimated 289,000 of the state’s 836,000 Medicare beneficiaries have Medicare Cost plans and have 21 Medicare Cost plans to choose from in 2015. Roughly 130,000 members of Eagan-based Blue Cross and Blue Shield of Minnesota are covered by the company’s Medicare Cost plans, known as Platinum Blue. Minnetonka-based Medica has more than 150,000 people covered by their Medicare Cost plans called Prime Solution. Bloomington-based HealthPartners also offers Medicare Cost plans called Freedom. Medicare Cost plans will be phased out at the end of 2018 in counties that have enrollments in excess of 5000 beneficiaries in Medicare Advantage plans. The Medicare Cost plan participants that will have their plans discontinued will likely see new Medicare Advantage plan offerings in those counties. MN Health Insurance Network will post new information as it becomes available.
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