Obamacare -- the Patient Protection and Affordable Care Act
('ACA') -- has done a huge amount to improve senior care across the
country, much of it through the expansion and modification of Medicare.
Among the many changes: the improvement to the efficiency and
effectiveness of Medicare has kept the Medicare Part B monthly premiums
down. In 2013, the premium was lower than analysts predicted -- a mere
$104.97; in 2014, it stayed $104.97.
That's impressive in and of itself. But the ACA has done more than just keep the Part B costs down; it's also reduced the cost and improved the effectiveness of Medicare Part C; the 'Medicare Advantage' program that allows private insurance companies to supplement the existing Medicare benefits at lower-than-normal costs.
Medicare Part C
For most seniors, the only viable alternative to Medicare Parts A and B is Medicare Part C, which allows private insurance to accept money from Medicare to pay part of the premiums for senior citizens. Because the payments are shared between the government and the citizen, the citizen is able to afford an insurance package they otherwise couldn't -- which, for most seniors, means "an insurance package that actually covers most health care costs."
By law, Part C plans have always been required to provide at minimum the same coverage offered by Medicare Parts A and B, but historically, they've been the source of some of the most ingenious developments in the senior care field, including the concepts of 'case management' and 'care coordination.' Nearly 30% of all Medicare recipients take advantage (no pun intended) of Medicare part C.
How the ACA Has Improved a Great System
The big 'problem' with Medicare Part C has been the disparity between the amount that private insurance has paid a provider for a given service through Part C and the amount that Parts A/B paid for the same service. The payouts varied quite a bit, with some policies paying under but most over-paying for the same service, putting 'standard' Medicare recipients at a disadvantage in the eyes of the medical establishment.
So, the ACA has enacted regulations that keep the Part C payouts to insurance companies within 5% of 'standard Medicare' payouts, based on the 'customary and reasonable' charges for each service within the geographical area where the service was provided. They've also required that Medicare Part C plans be sold on the same healthcare exchanges as traditional insurance, which means that seniors are now able to compare Medicare Advantages plans side-by-side and see which are the most cost-effective and offer the best coverage.
The effects of that change have been that insurance companies profit slightly less from each Part C participant they serve, in part because per-service payouts are down and in part because of the price competition caused by the exchanges. However, they serve significantly more participants, because more seniors are aware of and comfortable with buying Part C when it appears on the ACA health exchanges. The net effect is to the insurance companies' benefit: while profits-per-enrollee are down about 10%, the number of enrollees is up about 33%, so the bottom line is still increasing with each passing year.
That's impressive in and of itself. But the ACA has done more than just keep the Part B costs down; it's also reduced the cost and improved the effectiveness of Medicare Part C; the 'Medicare Advantage' program that allows private insurance companies to supplement the existing Medicare benefits at lower-than-normal costs.
Medicare Part C
For most seniors, the only viable alternative to Medicare Parts A and B is Medicare Part C, which allows private insurance to accept money from Medicare to pay part of the premiums for senior citizens. Because the payments are shared between the government and the citizen, the citizen is able to afford an insurance package they otherwise couldn't -- which, for most seniors, means "an insurance package that actually covers most health care costs."
By law, Part C plans have always been required to provide at minimum the same coverage offered by Medicare Parts A and B, but historically, they've been the source of some of the most ingenious developments in the senior care field, including the concepts of 'case management' and 'care coordination.' Nearly 30% of all Medicare recipients take advantage (no pun intended) of Medicare part C.
How the ACA Has Improved a Great System
The big 'problem' with Medicare Part C has been the disparity between the amount that private insurance has paid a provider for a given service through Part C and the amount that Parts A/B paid for the same service. The payouts varied quite a bit, with some policies paying under but most over-paying for the same service, putting 'standard' Medicare recipients at a disadvantage in the eyes of the medical establishment.
So, the ACA has enacted regulations that keep the Part C payouts to insurance companies within 5% of 'standard Medicare' payouts, based on the 'customary and reasonable' charges for each service within the geographical area where the service was provided. They've also required that Medicare Part C plans be sold on the same healthcare exchanges as traditional insurance, which means that seniors are now able to compare Medicare Advantages plans side-by-side and see which are the most cost-effective and offer the best coverage.
The effects of that change have been that insurance companies profit slightly less from each Part C participant they serve, in part because per-service payouts are down and in part because of the price competition caused by the exchanges. However, they serve significantly more participants, because more seniors are aware of and comfortable with buying Part C when it appears on the ACA health exchanges. The net effect is to the insurance companies' benefit: while profits-per-enrollee are down about 10%, the number of enrollees is up about 33%, so the bottom line is still increasing with each passing year.
Peter Mangiola, RN MSN has been in the health and wellness
industry for over three decades. He has served in Emergency, Recovery,
Cardiac Care, and Electrophysiology departments, as well as three years
as an Oncology Director, three years as director of an adult cystic
fibrosis program, eight years as Charge Nurse for a cardiovascular
nursing unit, and several years as owner/operator of two well known New
Jersey Senior Care agencies. Peter has been a regular speaker for many
groups and organizations over the years covering a wide range of topics.
He has also been a consultant, speaker, and educator in areas such as
Dementia, Alzheimer's, cognitive/behavioral issues, disabled children
& adults and obesity counseling. Learn more at http://www.petermangiola.com
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