INTRODUCTION

Congress has begun debating what to do about overpayments to the Medicare Advantage plans offered by private insurance companies under Medicare Part C.  As a result, it is likely that scare tactics about what will happen to beneficiaries if funding is reduced to levels closer to the costs of traditional Medicare will increase as well. One such tactic is to insist that payment cuts would result in “the end of a lifeline” for beneficiaries.

Contrary to what private insurance companies tell their enrollees, the general public, and Members of Congress as part of these scare tactics, Medicare beneficiaries will not be left without any health care coverage if funding is cut for Medicare Advantage plans. All Medicare beneficiaries will still receive coverage under Medicare, without filing another application and without going through a waiting period for pre-existing conditions.  The traditional Medicare program never abandons beneficiaries.  It is the real “lifeline.”

Congress included provisions in the Balanced Budget Act of 1997 (BBA) to help ensure that Medicare beneficiaries have a seamless transition in their health care coverage if private insurance plans decide to stop contracting with Medicare, regardless of the reason for this business decision. If a private insurance company decides to eliminate its Medicare Advantage plans as a result of possible changes to the Medicare Advantage funding structure, beneficiaries will be able to take advantage of these protections.

BBA PROTECTIONS

Medicare beneficiaries can return to traditional Medicare or choose another Medicare Advantage plan if their Medicare Advantage plan leaves Medicare.

·         Coverage under a Medicare Advantage plan that is terminating its contract with Medicare continues until the end of the calendar year when the Medicare contract ends.

·         The traditional Medicare program will continue to be available to all Medicare beneficiaries.

o       Beneficiaries who return to traditional Medicare can choose, and enroll in, a Medicare Part D prescription drug plan without paying a late penalty.

o       Those who wish to purchase a Medigap policy have specific rights protecting their ability to do so. 

o       Beneficiaries will continue to receive services for pre-existing conditions without having to go through a waiting period. 

·         Beneficiaries, including those with End Stage Renal Disease (ESRD), may join another Medicare Advantage plan if another plan is offered in their region.

Medicare beneficiaries make their decision about how to receive their health and drug coverage during the next annual enrollment period, which runs from November 31- December 31.

·         Beneficiaries are automatically returned to traditional Medicare unless they choose a different Medicare Advantage plan.  They do not have to file a separate application for traditional Medicare.

·         Beneficiaries who decide to enroll in a different Medicare Advantage plan must enroll by December 31. 

·         Beneficiaries who decide to return to traditional Medicare and who want prescription drug coverage must choose, and enroll in, a Medicare Part D prescription drug plan by December 31.

·         Coverage under the new Medicare Advantage plan or in traditional Medicare and a prescription drug plan becomes effective January 1. 

Medicare beneficiaries aged 65 and older may purchase a Medigap policy.

• Beneficiaries aged 65 and older whose Medicare Advantage plan terminated service are guaranteed issuance of Medigap Plans A, B, C or F. 
• Beneficiaries must purchase a Medigap policy within 63 days of the termination of their Medicare Advantage plan.
• Some states have additional provisions that give beneficiaries age 65 and older more choices of Medigap policies or that extend protections to Medicare beneficiaries younger than age 65.

CONCLUSION

Beneficiaries, their families and their advocates should not be fooled by cries that a reduction in overpayments to private insurance plans will leave older people and people with disabilities without any health care coverage.  The traditional Medicare program worked for decades without any interference from private insurance companies.  All Medicare beneficiaries enrolled in Medicare Advantage plans currently have this traditional, uniform, and stable Medicare program as a reliable option for coverage.  That might not be the case if Congress continues to pay Medicare Advantage plans more money, thereby hastening the projected insolvency of Medicare.

Congress needs to keep traditional Medicare, the real healthcare lifeline, strong.  End overpayments to private plans and increase reimbursements for health care providers under traditional Medicare to ensure uniform, nationally available coverage for our elders and people with disabilities.