Medicare is the nationwidehealth insurance program that qualifies all Social Security beneficiaries whoare either over 65 years of age or permanently disabled (Medicare Advocacy,2018). .
For those individuals who are over the age of 65 and have paid 10years of social security taxes, automatically qualifies for Medicare (Berenson,2015). Additionally, individuals who receive railroadretirement benefits and those that suffer from renal disease are also qualifiedto receive Medicare benefits (Medicare Advocacy, 2018). Medicare should not be confusedwith Medicaid as it does not have the same criteria as welfare. In terms ofdetermining eligibility, income and assets of a Medicare recipient is not an issue(Afendulis, 2012). Medicare procedures should not vary significantly from stateto state (Medicare Advocacy, 2018). Medicare coverage is like the coverageprovided by private insurance companies.
Just like a private insurance carrier,deductibles and co-insurance are required from the beneficiary (Berenson, 2015). If an individual is eligible forMedicare they can chose between getting their benefits through traditionalMedicare or getting benefits through Medicare Advantage (Berenson, 2015).Before deciding on which program to enroll, the individual must consider theircircumstances which include their health, budget, desire for flexibility, andtolerance for financial risk (Medicare Advocacy, 2018).
It’s important to knowthe different portions of Medicare and how they work collectively beforedeciding if this is the right program. Also, its important to identify the maindifferences between the two, traditional Medicare and Medicare Advantage. Askingquestions and gathering information is the most important thing beforeenrolling in either of the two plans (Medicare Advocacy, 2018).Medicarehas four coverage components Part A, Part B, Part C, and Part D. Traditional Medicare, which consists of Part Aand Part B, is managed, and run by the federal government (Medicare Advocacy,2018). Part A covers the overall hospitalization expenses such as skillednursing facility care, home health, and hospice care whereas Part B covers themedical expenses such as doctor visits, medical equipment, lab tests,ambulatory services, and outpatient procedures (J Oncol, 2009). Medicare Advantage, which consists of Part C,is managed, and run by private insurers (Medicare Advocacy, 2018).
Itis basically a different way of getting Medicare Part A and Part B coverage. However,Part C may be chosen in place of traditional Medicare. There are someadditional programs as well which is included in the Medicare part c. Part C Medicare is also called Medicareadvantage. “This specific Medicare plan is run by private insurance companies, butthey are curated and regulated by the federal government” (Medicare Advocacy,2018). Medicare part C plans are mandatory to offer the overall coverage whatMedicare plans A and B offers. Most of the Medicare C plans include theprescription coverage and therefore can be upgraded to a Medicare part D plan.Medicare advantage plans combine Part A and Part B and often Part D, into oneplan so the entire package of benefits comes from a private insurance company(J Oncol, 2009).
“Part D is the part of the Medicare program that providesoutpatient prescription drug coverage” (Medicare Advocacy, 2018). Similarly, PartD is administered and run by private insurance companies that have contractswith the federal government (J Oncol, 2009). Part D coverage must be purchasedseparately if you have traditional Medicare or a Medicare Advantage plan thatdoes not include prescription drug coverage (Medicare Advocacy, 2018). Anotherterm for this is “stand-alone” Prescription Drug Plan (Medicare Advocacy, 2018).However, a Medicare Advantage plan that includes health and drug coverage isreferred to as a Medicare Advantage Prescription Drug plan (J Oncol, 2009). Somerecipients have union coverage that pays costs that traditional Medicare does notcover (Berenson, 2015). Those who do not may need to buy Medicare SupplementInsurance (also known as Medigap) (Medicare Advocacy, 2018).
Any co pays,coinsurances, or deductibles left by traditional Medicare, Medigap plans helppay for those gaps (J Oncol, 2009).In certain situations, recipient with traditional Medicare must purchase aseparate Part D drug plan as well as a Medigap plan to supplement theirMedicare benefits (Afendulis, 2012). Because Medigap guidelines do not workwith Medicare Advantage, it is against the law to sell a Medicare Advantagerecipient a Medigap policy (Medicare Advocacy, 2018). Nevertheless, the onlyway for that to take place is if the recipient is switching over to traditionalMedicare.
Thereare a few key differences between Traditional Medicare and Medicare AdvantagePlan. Some of those differences between the two include access to services,cost, and benefits (Berenson, 2015). Traditional Medicare allows the enrolleeto go to any doctor or hospital in the US that will accept Medicare.Traditional Medicare does not have a network so referrals and priorauthorization to obtain services are not required (J Oncol, 2009). However, anyMedicare Advantage enrollees are limited to the network of providers for theplan to cover their care (Berenson, 2015).
These enrollees must obtainreferrals and have prior authorization before the services are provided(Afendulis, 2012). Additionally, they may be required to choose a Primary CareProvider (PCP). Although there arecertain Medicare Advantage plans that could cover the services provided outsideof the network, it’s more likely for that enrollee to have to pay more out ofpocket (Berenson, 2015). Being that emergency and urgent care might only be coveredby this plan if you are outside of the service area, it’s important to schedulea follow up appointment (Medicare Advocacy, 2018). In the Medicare Advantageplan, network providers have the ability to join or leave at any time duringthe year as well as the Medicare Advantage plan have the advantage of changingthe providers in the network (Berenson, 2015). However,the enrollee must wait until the following year, during open enrollment period,to leave the plan (J Oncol, 2009).Again in traditional Medicare,any individual who have worked and paid social security taxes for at least 10years qualifies for Part A coverage (Berenson, 2015). With traditionalMedicare, there is a monthly premium for Part B coverage that has to be paid aswell as deductibles, coinsurance, and co pays (J Oncol, 2009).
There are no outof pocket limit on what the individual could spend on healthcare. Part D drugcoverage and Medigap plan must be purchased separately with traditionalMedicare (Medicare Advocacy, 2018). Similar to traditional Medicare,Medicare Advantage enrollees must pay the same monthly premium for Part Bcoverage (J Oncol, 2009). However, the cost in Medicare Advantage plans varies.Out of pocket expenses depends on the plan chosen and may include the following:whether the plan charges an extra monthly premium and what network providersare used, if the plan has a yearly deductible, the co pay or coinsurance foreach visit, and the type of services the individual is seeking (MedicareAdvocacy, 2018)Medicare Advantage plans could possibly change theirbenefits, co pays, and premiums yearly (Afendulis, 2012). In terms of cost-sharing, Medicare Advantage plans may charge for a service that is above orbelow the traditional Medicare cost-sharing for that service (MedicareAdvocacy, 2018).
However, Medicare plan can not surpass the cost-sharing forthose services under traditional Medicare (Berenson, 2015). Some of thoseservices include chemotherapy administration, renal dialysis, and skillednursing care (Medicare Advocacy, n.d). For Part A and Part B coverage, MedicareAdvantage plans have a maximum out of pocket limit on the amount ofcost-sharing they can charge (J Oncol, 2009). The good thing about that is thatthe individual would not be required to pay anything for the remainder of theyear.
In terms of benefits, traditionalMedicare and Medicare Advantage have a standard benefit package that coversmedically required health care services (Afendulis, 2012). However, thedifference between the two is that traditional Medicare do not coverprescription drug whereas Medicare Advantage does. The traditional Medicareenrollee must purchase a Medigap plan and Part D coverage in order to receiveprescription drugs (J Oncol, 2009). Another difference is that Medicare Advantage covers services such asvision, dental, and hearing whereas traditional Medicare does not cover thoseservices. With traditional Medicare, there are better selectionsof doctors and freedom of choice to select your preferred healthcare organization(Afendulis, 2012). Many individuals usually support and remain loyal to thetraditional Medicare system as oppose to the privately insured MedicareAdvantage. Medicare Advantage plans have the ability to change at any giventime whereas traditional Medicare plans pretty much stay consistent but thereare several protocols that have to be taken in order to make changes in thetraditional Medicare plans (Medicare Advocacy, 2018).
Some of the perks with having Medicare Advantage plansare that they provide a wide coverage of different Medicare options. The enrollees have the option to select theservices they want and don’t want. Hence, they could possibly see a lower premium based upon their selection(Berenson, 2015). Medicare Advantage plans can be extended andoffer additional coverage such as vision, dental, etc. Some Medicare programscan be expensive and doesn’t cover as much as shown in the Medicare Advantageprograms (J Oncol, 2009). Some of the downfalls with Medicare Advantage plansare that they can change at anytime without giving notice to the individual andthere is no supporting evidence to prove the quality of their program (MedicareAdvocacy, 2018). Yet, Medicare Advantage programs are more attractiveand beneficial to a physician and hospital.
Because Medicare Advantage programstend to provide a higher number of coverage and tend to be more than thetraditional Medicare program, it’s seen as a better match for the physician andmedical facilities (Afendulis, 2012). By accruing more revenue from theindividual’s social security, this increases the overall revenue for thehospital as well as the physicians (J Oncol, 2009). That’s why the MedicareAdvantage plan would be an ideal choice for the hospital and the physician. As a way of physician reimbursement, capitation hasbeen around longer than fee-for-service (Healthcare Incentives, 2015). Capitationis the opposite of fee-for-service.
Capitation payments are payment arrangementbetween the state and health plan upon a capitation contract by a healthinsurance and medical provider (Investopedia, 2018). They are fixed monthlypayments by a provider, clinic, or hospital per patient enrolled in a healthplan (Alguire, 2018).The fixed monthly payments are calculated one year inadvance and it remains fixed for that year despite how often the patient seeksmedical services (Investopedia, 2018). Basically,physicians get a guaranteed income flow based on the range of services that areprovided, the number of possible patients they may see, and the time frameduring which the services are provided (Alguire, 2018). The purpose of capitation is to put healthpractices at risk for a set per member, per month fee allowing it to have astrong incentive on managing the care of patients so that a profit can be made(Healthcare Incentives, 2015). The information is available to the public as ameasure of healthcare quality as well as be linked to financial rewards(Alguire, 2018).
When a primary care physician signs a capitationagreement, some of the services included in the payment plan are preventive,diagnostic, and treatment services, injections and immunizations, outpatientlaboratory tests, routine hearing and dental services, and counseling services(Alguire, 2018).Under a capitation system,healthcare service providers could be paid per month or per patient regardlessof how many times patients are scheduled to be seen or despite what servicesare being rendered (Goodson et. al, 2001).
Capitation gives health careproviders a secure, expected cash flow (Healthcare Incentives, 2015). Whetheran individual seek care for each period of time, healthcare providers are paida set amount for each registered individual assigned to that physician (Investopedia,2018). For instance, a primary care physician may be paid $30 for each one ofthe 120 patients under his/her cares, for every month, yet the doctor may onlyend up seeing 35–40 of them (35-40 visits) on average. In simple terms, thephysician collects an average of about $90 per each patient’s visit during anaverage month.The amount of compensation is based on the average projectedhealthcare utilization of that patient (Goodson et. al, 2001). In other words,more compensation is remunerated for patients with general or complicatedmedical histories. Additional factors that need to be considered are physicallocation, sex, race, employment type, and age.
In my cases, a risk pool is recognizedas a percentage of the capitation payment (Alguire, 2018). That means that themoney in the risk pool is not accessible to the physician until the end of afiscal year. Therefore, if the health plan does financially well, the money ispaid to the physician; however, if the health plan does not do financiallywell, the money goes toward shortage expenses (Alguire, 2018).With the aspect of care delivery, the capitationsystem provides financial confidence to doctors, hospitals, and insurance (Goodsonet. al, 2001).
Healthcare providers assume the risk of more patients, who havebecame sick and needs care, than anticipated. In reference to the primary carephysician example, if an illness spreads amongst the doctor’s patients, he/she mayend up seeing 55-60 patients three or more times in that month forapproximately over 200 visits. Thus, the physician will receive around the samepayment, averaging about $18 per visit.Capitation has been used as a base system in healthprograms for over a decade ago.
Large insurance companies steered away fromsystems because the rising costs of lab tests, diagnostic procedures, andmedication were severely restricting earnings (Goodson et. al, 2001). A goodtactic to reduce operational costs would be to combine capitation for basicservices and payments for less-required health care needs (Goodson et. al, 2001).
Capitation encourages preventive health care while limiting the treatmentsallowed for cost examination and alterations between doctors, serviceproviders, and health programs (Goodson et. al, 2001). As a payment model, capitationhas become the preferred form of providing health care payments for medical andhealth plans because it allows physicians to improve the management ofresources at a local level (Goodson, et. al, 2001)..