What Factors Led to the Creation of Medicare Advantage Plans?by Paul Binsurance Health Insurance Coverages
Summary: The present article is all about Medicare Advantage plans. It talks about the factors responsible for the creation of these plans.
When Medicare came into being as a law approximately five decades ago, private insurance companies created Medigap plans or Medicare Supplements. This helps people meet all those health care costs also which Medicare does not cover like yearly deductibles, co-insurance and co-payments.
For years together Medicare supplements New York plans were the only options available. But, in the year 1997, the government created an unprecedented program known as Medicare Advantage or popularly MA. This plan is not Medicare supplements and operates in an entirely different manner. So, it is important to know the difference between the two and then choose what would be the right option for you.
Factors Responsible for the Creation Medicare Advantage Plans:
For most of the people, both Medigap and Medicare were too expensive and both the co-insurance as well as medicare deductibles increase with inflation. Since Medicare supplements and medigap plans cover the all the costs for the insured, the monthly premium for these plans kept on increasing.
Secondly, most of the Americans are of the belief that their social security is their sole retirement income. For a long time people did not even realize that this income is not enough to meet all their expenses. As a result of which a large number of people above 65 years of age could not even bear the cost of Part B and the premium for Medigap plan. The problem was worsened by the fact that Medicare did not cover the retail prescription drugs so the insured had to shell out money every time they buy prescription drugs.
Owing to these reasons the Medicare beneficiaries begin to cry foul. When things began to take an uglier turn there are certain beneficiaries that decided to forego Medicare supplements and took a chance. Due to this a trail of tragedies followed. People healthy at the age of 65 decided not to buy this insurance policy. But, when that individual needed chemotherapy or open heart surgery he failed to pay it from his own pocket after paying 20% to the Medicare. Congress apprehended it as a big problem. It though that the elderly would be denied health care this way.
Above all, there was an inherent budget problem with Medicare because there was no way to estimate how much any insurance beneficiary would spend on the healthcare cost. Some people with minor ailments cost not such as the others with serious medical conditions where hundreds of dollars had to be shelled out. This led a difficulty in creating budget. Federal Government could not decide how much would be spend annually on healthcare for senior American citizens.
Annuity Insurance is a different type of insurance policy meant for accepting and growing funds and on annuitization creates a regular stream of payments.
Created on Jan 22nd 2019 03:27. Viewed 237 times.