What if employers want to continue to provide retiree coverage from their plan?
There are two ways to go: the traditional wrap plan or the Medicare Advantage Plan, which is the newer version of the retiree plan. With traditional Medicare plus a wrap, you get the government-run plan and wrap it with the private solution. With Medicare Advantage, you’re getting a full private solution for your retiree benefits.
Medicare Advantage Plans tend to look a lot like coverage for the under-65 population. There are co-pays, deductibles and wellness features. Those are part of Medicare Advantage but not part of a traditional wrap plan.
Everyone faces co-pays and deductibles, and those are shared costs retirees understand. To use common vernacular, a wrap plan is the 1.0 version of retiree benefits and Medicare Advantage is 2.0.
How can employers use the Medicare Advantage Plan?
They can offer it as an alternative to curb their costs and provide features that will appeal to members. This plan is a little less confusing than others because members have just one card for all aspects of their coverage. There isn’t a Medicare card, a private insurance card, a pharmacy card — it’s all covered together, so care is better coordinated across the full spectrum.
What does a Medicare Advantage Plan cost an employer?
There is such a wide variety available, so it depends on what you choose. Medicare Advantage Plans are usually less expensive than wrap plans because they have managed care features, co-pays and deductibles. It is usually a less expensive option, but how much less depends on how you design the plan. You could go with a very rich Medicare Advantage Plan and have it cost the same as a traditional wrap plan.
What are the employer benefits to offering a Medicare Advantage Plan for retiree benefits?
One major benefit to employers is total cost because those plans are usually less expensive. The member experience is better because it’s not a fragmented plan — it’s all coordinated under one umbrella. Also, quality is another benefit because of the plan’s features, such as having all the care coordinated, and the focus on wellness and prevention.
You can think of it as cost saving — if you avoid a readmission, your costs are going to be lower — but it reflects better quality of care and a better member experience, as well. After just getting out of the hospital, the last thing anyone wants is to get readmitted. You can really only make that kind of impact on seniors’ care with a Medicare Advantage Plan because the responsibility is fractured on wrap and supplemental projects.
Joan Budden is chief marketing officer at Priority Health. Reach her at (616) 464-8703 or [email protected].
