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2017-10-20 / News

Medicare Advantage plan premiums will lower slightly next year

Regional Business Analyst

On Oct. 1, UPMC Health Plan released its statewide Medicare Advantage plan rates for 2018. Members in most of UPMC’s six for Life Advantage plans will see their monthly premiums reduced by $2 to $14 next year. UPMC’s for Life HMO Rx Enhanced plan members will see an $8 increase to $263 per month.

Nationally, the average monthly premiums for Medicare Advantage plans next year will decrease by almost $2, from $31.91 to $30, according to the Centers for Medicare and Medicaid Services (CMS).

UPMC also announced that it plans to continue its in-network coverage for UPMC for Life “snowbird” members who travel to Florida. They can receive routine care from Florida providers at no extra cost. UPMC will also be offering discounts for Advantage members who use its preferred pharmacy network.

Highmark is offering a new Community Blue Medicare PPO for 2018, and it’s expanding its popular Community Blue Medicare HMO zero-premium plans to central and northeast Pennsylvania.

Medicare Part C is available through Medicare Advantage plans, which are insurance products offered by private health insurance companies as alternatives to the original Medicare Parts A and B. Medicare Advantage plans and associated fees must be approved by the Centers for Medicare and Medicaid (CMS).

Advantage health plans are typically managed health care plans such as HMOs and PPOs that are legally required to offer at least the same benefits as original Medicare, but they can also include other coverage such as vision care or dental benefits, health wellness programs, or prescription drugs. Medicare Advantage members must first sign up for both Parts A and B of Medicare.

Typically, the lower the premiums and/or deductibles, the less benefits, but according to John Lovelace, president of UPMC Health Plan’s government programs, UMPC has been able to apply cost-savings and efficiency measures to its Medicare Advantage plans that have enabled UPMC to lower costs while increasing benefits.

“Our successes are built largely on what we call an integrated delivery and financing model,” said Lovelace.

“We have aligned incentives with the payer so that we provide the right amount of care at the right time for the right person.

“The old fee-for-service model made its money by doing more and more things for people, but we make our money through efficiencies, flexible contracting and care coordination.”

“CMS has continued to push managed care,” said Lovelace.

“The Medicaid in Pennsylvania is entirely managed care for the same reason, namely, that private organizations have more flexibility in building contracting relationships and clinical relationships with provider systems, which creates better results for less money.”

Those contracting relationships include pharmacies.

“We have a big pharmacy network in a lot of areas, but if you go to certain pharmacies that are preferred, typically big companies such as Costco and Walmart, you can get drugs less expensively, and most generic drugs are free,” said Lovelace.

The future of Medicaid funding remains questionable after three attempts by Congressional Republicans to make deep cuts to the program; however, Medicare was never in jeopardy, which takes the uncertainty out of health insurers offering Advantage plans.

“Like everything else about health care these days, Medicare has a political element, but it’s a big issue for seniors who depend on their monthly checks. And they are a huge block of voters, whereas Medicaid recipients are not.” said Lovelace.

“So, it’s easier to whack the benefits of people who aren’t voting than those who are, and that’s why they haven’t touched Medicare.” .

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