In the past, it has been a pretty even playing field between Medigap and Medicare Advantage plans.
That may no longer be the case.
This June, in a compelling stroke of bipartisanship, congress made some changes to the way that Medicare Advantage, or MA, plans work. If you’re not familiar (or need a refresher!), MA plans are provided by private insurance companies that contract with Medicare to provide both the base Medicare benefits and additional perks to their enrollees. In the past, this has included things like fitness programs and dental and vision benefits. This new expansion allows the companies to expand the definition of what is considered a “supplemental benefit” to allow inclusion of things like installing stabilizing equipment in showers and elsewhere in the home, and maybe even home healthcare.
Previously Medicare was only able to cover things that were considered medically necessary. For instance, Medicare would pay for injuries that were a result of falling in the shower because they were treatment, but would not pay to install bars for stability in the shower of a Medicare enrollee because it was not treating a specific cause. This was often to the frustration of doctors and caregivers, who could see obvious changes that could be made to improve the health and safety of their patients that were not covered.
These new changes came down too late for the private insurers to make any significant changes to their plans that will be available to consumers in 2019, but MA plans may look significantly different in 2020.
There are certainly concerns about this. If these plans do expand to include home health care, what will the limitations be? Insurance companies calculate rates by averaging the cost of the plans in previous years, and if a significant number of enrollees are making claims on home health care (which has a significant cost), it is not unreasonable to think that these plans may be expensive. But when compared with the cost of Long Term Care Insurance, consumers may still save a significant amount of money!
How can Medicare enrollees benefit from this? The annual Medicare open enrollment period is October 15th to December 7th, with plans going into effect January 1 of the next year.