More managed care plans take on Medicare

Sunday, July 3, 2005

WASHINGTON -- CMS announced last week that it had approved 143 new managed care plans for service in 2005, a dramatic boost over the number of plans previously available to seniors.

With the addition of the new plans, Medicare beneficiaries will have access to 428 health plans across the country, including 41 plans that are new to the program and 66 new local PPOs. Fifty-three of the new plans started offering services last Friday.

At AAHomecare's annual legislative conference last month, former CMS Administrator Tom Scully predicted that as many as a half of all Medicare beneficiaries will migrate to PPO plans in five years.

In western Michigan, Steve Slater can't see it. "I think you'll see the same reaction to more managed Medicare as the presidnet got when he started talking about privatizing Social Security," said the vice president of Airway Oxygen in Grand Rapids. "People love Medicare the way it is."

Nevertheless, CMS reports that 50,000 beneficiaries are joining a Medicare Advantage plan every month. Five million beneficiaries are enrolled in managed Medicare plans.

Scully told AAHomecare that 89% of Medicare beneficiaries are insured by the traditional plan, which pays reimbursement off of a fee schedule; 11% of beneficiaries are enrolled in managed Medicare plans.

Now, 73% of all beneficiaries have access to Medicare HMOs, 52% will have access to PPOs, and 80% will have access to private fee-for-service plans.

CMS is selling these new Medicare Advantage plans as an opportunity for more benefits and greater savings. If seniors join one of the new plans, for example, CMS says they'll save about $100 per month on Medigap insurance.