They sound too good to be true: you sign up for a Medicare Advantrage plan and the plan will pay for most of your Part B premium of $99.90 if you are in the lowest premium rate bracket for Part B. The reduction for many plans is $96.40 this year if you have enrolled in one of the Medicare Advantage plans.
What is the catch? For one the plans are almost always HMO plans that require you to use the plan providers and not the doctor of your choice. How did these plans find this extra money? What happens is the plans receive a budget from CMS based on what Medicare will pay the plan per member per month for the upcoming year. The plans are free to design the benefits as long as they cover all the things that Medicare covers in benefits. The plans setup various co-pays or co-insurances for the benefits they allow. If they do not use up all of the budget they must give back 25% of the unused money to Medicare (CMS) and return 75% of the unused money to plan beneficiaries. You get dollars instead of benefits.
The givebacks are based on the budget allowed each year. In years where there are cutbacks on Medicare Advantage allowances you will normally see the givebacks reduced or removed from the product. When you soon see the new plans in October be sure to examine the plan’s position on the giveback for 2013. These welcome bonuses are not guaranteed from year to year. Also they are unique to Florida, they are done hardly anywhere else in the country.
Betsy Vipond is CEO of The Senior Health Advisor and has been in insurance for over 33 years. She is a board member of Tampa Bay Health Underwriters part of the National Association of Health Underwriters and specializes in Medicare products. You may contact her at (800) 603 0901.