Predictions that Medicare Advantage will disappear seem to be very wrong. I am one who predicted that companies would be getting out of the Medicare Advantage business due to cuts in funding and limits on profits that have been imposed by Democrats.   Here is an article I found on FoxBusiness.com that debunks my theory.

NEW YORK (Reuters) – WellPoint Inc wants to expand its Medicare business to take advantage of the post-war baby boom generation becoming eligible for the U.S. government-sponsored health program, the health insurer’s chief financial officer said on Wednesday.

WellPoint can “absolutely” compete with the two biggest Medicare players — UnitedHealth Group Inc and Humana Inc — and will take market share over the next three to five years, WellPoint CFO Wayne DeVeydt said in an interview.

“It’s a space that we will want to play in and we will want to expand in,” DeVeydt said. “You will definitely see us take a more prominent role prospectively in the Medicare sector.”

Some investors have been bearish on Medicare Advantage — the growing part of the program run by private companies — because under the new healthcare reform law, Medicare payments to insurers will be frozen next year and be reduced beginning in 2012.

But DeVeydt called Medicare a “huge growth opportunity for us.” WellPoint, the largest U.S. health insurer by membership, operates in 14 core states, and in those states, the company anticipates about 40 percent of its existing membership will become eligible for Medicare in the next few years.

“Even with potential margin contraction … it is a space where the population is going,” DeVeydt said, speaking after the company posted second-quarter results on Wednesday.

WellPoint has about 350,000 Medicare Advantage members, which substantially trails UnitedHealth and Humana.

But DeVeydt said WellPoint’s business providing supplemental Medicare plans — for which it has about 850,000 members, placing it second behind UnitedHealth — puts it in a good position, as do its extensive physician networks in its core states.

“We know we that we offer products that seniors want,” DeVeydt said. “We think we can compete extremely well … and with the size of the population aging in, we believe we’ll be a net taker over the next, say, three to five years.”

Asked if WellPoint could compete on a national scale with UnitedHealth and Humana, DeVeydt said: “Absolutely.”

DeVeydt said the company would seek Medicare growth both organically and through deals. Speaking about the merger climate generally, DeVeydt said while there is a lot of discussion, too much uncertainty still exists about the fallout from the new healthcare reform law.

NOTE: Wellpoint is a minor player in the Arizona Medicare Advantage market.  Unicare is a Wellpoint company offering private-fee-for-service Medicare Advantage plans in Arizona. These types of Medicare Advantage plans are supposed to be canceled in 2011 unless the company creates a provider network.

The brand new Medicare Supplement Plan N is proving to be very popular with seniors who want lower premiums but comprehensive coverage to fill the gaps in Medicare. I was just talking with a representative of a well-known Medicare Supplement company that has been overwhelmed with 30,000 applications for Plan N coverage.  I can’t provide the name of this company because they think my writing about them constitutes advertising and they track what is written about them on-line and in the press.

The reason this company is overwhelmed with applications is because they are allowing seniors to apply for their new Plan N Medicare Supplement without having to answer any medical questions – no matter how old the person is.  While other Medicare Supplement companies are asking more medical questions of their applicants, this company has decided to make an exception for everyone applying for Plan N.

Plan N is a new Medicare Supplement that went into effect on June 1st.  This plan costs about 25% less than Plan F, which is a Medicare Supplement that fills all the gaps in Medicare.  Plan N costs less because it will require seniors to pay $20 co-pays when they see a doctor in the doctor’s office.  Seniors will also pay $50 if they go to the emergency room. Additionally, the Part B deductible ($155) is not covered by Plan N, and the plan does not cover excess charges (which very few doctors charge anyway).  Every other service (hospital stays, labs, physical therapy, chemotherapy, radiation treatment) is covered completely beyond the co-pays mentioned here.  Medicare pays its part of the bill and Plan N will pay the balance.

I asked this company representative how long they will continue their open application policy for Plan N.  I was told they have no plans to change it in the next few months.  Hopefully the policy will continue through the end of the year when Medicare Advantage enrollees will be able to get out of their plans, go back to Medicare, and get a Medicare Supplement.  Plan N might be the only option for people who might not pass the health questions required by most Medicare Supplement companies. Hopefully they will still have a chance to get Plan N with no questions asked by this company.

NOTE: When you turn 65, or when you first get Part B, you have a six month “guaranteed issue period” during which you can sign up for a Medicare Supplement without answering medical questions. This is very important for people with pre-existing conditions because they cannot  be refused a Medicare Supplement during their guaranteed issue period.

CLICK HERE FOR MORE INFORMATION ON YOUR MEDICARE CHOICES.

If you are turning 65 in the next few months, you have choices to make concerning your Medicare coverage.  Are you still working and have employer coverage? Will you consider enrolling in a Medicare Advantage plan? Do you think a Medicare Supplement will be better coverage?

Here is some information to get started in understanding your Medicare choices:

MEDICARE ONLY: You will be responsible for the Part A hospital deductible ($1,100 ). You will pay the Part B deductible ($155). You will be responsible for 20% of the cost for doctor visits and services, lab tests, emergency room treatment, ambulance, chemotherapy, radiation therapy, physical therapy, and most medical care you receive outside a hospital.  THERE IS NO CAP TO YOUR 20% CO-INSURANCE.   The Medicare Part B premium is $110.50 per month.

MEDICARE SUPPLEMENTS: These work with your Medicare to give you more complete coverage. Also known as “Medigap ” plans, these fill the gaps in Medicare. A Medicare Supplement Plan F will generally leave you with no medical bills because Medicare will pay first and your Plan F Medicare Supplement will pay the balance after Medicare has paid.  I always say, “think FULLEST coverage when you think of PLAN F”.

Medigap plans are named by letters: A, B, C, D, F,  G, K, L, M, N   and each one covers the gaps in a slightly different way. Because F offers the fullest coverage, it has the highest monthly premium.  Plans M and N are new in June.  Plan N is very much like Plan F except you will pay a $20 co-pay for doctor appointments, $50 for an emergency room visit, and $155 for the Part B deductible. Because of these co-pays, the monthly premium for Plan N is generally 25% less than Plan F.

Medigap plans in Arizona cost between $85 per month for Plan N and $129 per month for plan F.  A Plan F is exactly the same from company to company, except that the premium will differ from company to company.

MEDICARE ADVANTAGE:  These are private Medicare plans offered by insurance companies - and they replace your Medicare. If you enroll in an Advantage plan, you won’t use your Medicare card because Medicare doesn’t pay your bills.  You will use the card given to you by your Medicare Advantage (MA) plan and your MA plan will pay your bills.  Many MA plans in Arizona have a $0 premium, though you must pay your Medicare Part B premium ($96.40 or $110.50/month). You will have co-pays for every medical service. For example, you might pay $15 when you see your primary care physician.  And you might pay $45 to see a specialist. Then there are hospital co-pays, emergency room co-pays, co-pays for labs, x-rays and other services.

Almost half of all Medicare beneficiaries in Maricopa, Pinal, and Pima counties are enrolled in these private Medicare plans. People like them because they usually include a Part D drug plan. Most have a monthly premium between $0 and $60.  The premium is low because these plans almost always involve a local network (HMO or PPO) – and because Medicare pays a lot of money to the insurance companies to provide your Medicare coverage.  Most Advantage plans offer free gym memberships.

Most Medicare Advantage plans have a network of doctors and hospitals, and you must stay in the network.  Most Advantage plans are HMO’s which require you to have a primary care physician who gives you referrals to specialists. Most plans will require you to get prior authorization for certain tests, treatments, and hospitalization (except in an emergency situation).  If you do not follow all the rules, bills will not be paid by the plan.  Each MA company has different co-pays, rules, and networks – though many doctors are contracted with multiple MA plans.

PART D: This is the drug plan which Medicare wants you to have (and pay for). If you get a Medicare Supplement you should also sign up for stand-alone Part D plan.   Part D is offered by insurance companies that are contracted with Medicare.  In Pima county there are 46 Part D plans to choose from and each has a different monthly premium and a different formulary (list of drugs covered).

Part D premiums range from $17 to $70 per month.  Before signing up for a plan, you need to be sure your drugs are covered by that plan and what your co-payment will be.  If you are enrolling in a Medicare Advantage plan, Part D usually comes with the plan.  But you still must make sure all your drugs are covered and what your co-pay will be.

FOR MORE INFORMATION ON YOUR MEDICARE CHOICES, CHECK OUT THIS VIDEO, “AN INTRODUCTION TO YOUR MEDICARE CHOICES”.

PS:  If you are working for a large employer and have group health insurance, you won’t need to use your Medicare or pay the Part B premium.  Your employer must keep you and your spouse on the group health plan.