There are currently numerous options
available for retiree health care coverage, such as the choice of a standard plan to supplement basic Medicare,
called Medicare supplement, or customized plans offered by an employer that
supplement or “wrap” around Medicare.
There are Medicare Advantage Plans of
various designs and benefit offerings structured like HMOs or Preferred Provider
Organizations (PPOs) and even Private Fee
For Service Plans. Employers can select
plans off the shelf or develop customized
plans to meet their needs.
Thanks to the Medicare Modernization
Act, employers now have options that previously weren’t available to business owners, says Edward Ries, executive director
of government programs with Priority
Health.
Smart Business spoke with Ries about
retiree benefit programs and how employers can choose a program that provides
sufficient coverage at a reasonable cost.
What is the Medicare Advantage Program?
The Medicare Advantage Program (MAP)
provides benefit plans that have full coverage similar to regular Medicare, but coverage is provided by private companies
under contract to the federal government.
This allows retirees to receive, at a minimum, the same set of benefits offered by
the federal government but with the specialized service a private company is able
to offer. Frequently these plans can offer
benefits beyond regular Medicare. This is
not a supplement plan; it is a replacement
for a standard Medicare plan also referred
to as Medicare C. To be eligible for the
MAP, you must be eligible for both
Medicare Part A and B. This program does
not require a consumer to purchase supplemental coverage. In fact, it is illegal for
agents to sell a supplemental plan if they
know an individual is covered by the MAP.
Why would a consumer want to receive coverage from a private company?
Private companies are able to coordinate
care for consumers. After joining a plan,
consumers may fill out a detailed medical survey that is used by the private company
to help guide the consumer toward the
most appropriate care. With this information, the provider is able to help the consumer select physicians and plans that
meet his or her individual needs.
Frequently, MAPs provide more benefits
than you may get with Original Medicare.
There is a higher focus on delivery of quality care through private companies that use
various means to monitor the care that is
provided. These companies check the professional and educational backgrounds of
all their participating physicians to ensure
that their customers are receiving care
only through highly qualified individuals.
This takes some of the research, leg work
and uncertainty out of the process for the
consumer.
What are the benefits of the MAP for
retirees?
There are also significant cost advantages for consumers. Medicare typically
requires 20 percent co-pay for services.
MAPs frequently have a set co-pay, which
can provide both major cost savings and
predictability for a retiree. There are additional benefits or specialized services with
the MAP. This program may offer additional disease management programs for consumers that are not offered in regular
Medicare. Finally, the MAP is run by private companies and, therefore, they are
able to offer better customer service. This
means there will be a person on the end of
the line whose sole job is to help you if you
have questions about coverage or costs.
What does the MAP cost an employer?
The cost depends on how generous
employers want to be with their retiree
coverage. There are some programs that
carry very low premiums so an employer
could provide that plan at very little cost.
Often, employers add benefits to the
plans so that retirees receive the same benefits they did when they were employed.
The cost varies depending on the choices
the employer makes for their retirees.
Because of the variety of plans, it is
important for employers to review the
details of each plan carefully and determine which plan meets the needs of their
employees and retirees. Look at financials.
The size of the company also may determine the plan that they offer. While larger
companies are usually able to offer retirees
benefit plans, the MAP enables companies
of all sizes the ability to adjust their plans
to work with their financial abilities.
Why are employers selecting the MAP
instead of other options for their retiree coverage?
A MAP is very easy to administer. You
have the power to select the benefits the
retirees receive while removing yourself
from the day-to-day administration that
benefit service requires. Selecting this program makes the transition into retirement
much easier for the employee. It provides
continuity for retirees because they will
likely still be able to select the same coverage and physicians they were using while
they were employed.
EDWARD RIES is executive director of government programs with Priority Health. Reach him at [email protected] or
(616) 464-8296.