New Rules for Medicare

The Obama administration on Monday raised the bar for Medicare private insurance plans seeking to win the government’s seal of approval and continue dealing with Medicare. There are now new restrictions on the health plans. The plans have been quite popular with seniors yet also criticized for marketing abuses and charging high costs to the government. The plans, offered by major insurers such as UnitedHealthcare and Humana, made a great deal of profit under Republicans but are seen by Democrats as undermining the traditional program.

Medicare officials said the changes include cutting back on the number of versions of a plan that insurers can offer, protecting patients with chronic diseases from excessive co-payments and banning a practice by some plans that can add even more to the costs of brand-name drugs-even if generics are not available.

About 10 million seniors get comprehensive medical coverage through such plans, and another 17 million are signed up in private drug plans. Every year, they have the opportunity to sign up or change plans during an open-enrollment period.

Well now there are new rules. The Centers for Medicare and Medicaid (CMS) has set new policies for Medicare Advantage providers that will require it to eliminate or reduce out-of-pocket fees charged to enrollees by 2010. CMS also plans to take a more proactive role in overseeing the Medicare Advantage providers to ensure adherence to its new rules.

Under the new CMS rules, enrollees’ annual out-of-pocket costs are not to exceed $3,400, which is a relief. Even though that is a lot of money, before this restriction many seniors were losing $6,000 to $8,000 in payments that should not have been that high. Medicare Advantage providers cannot charge more than Medicare charges for dialysis, home health care and other services. Nor can enrollees be discriminated against on the basis of their health status or income, or charged more than Medicare would charge for care.

Providers will now also have to clearly and publicly state what they are doing to lower drug costs, such as offering generic versions of medications. CMS says that it will strictly enforce these rules to protect the rights of vulnerable patients. Medicare Advantage providers will also be required to cut the number of plans they sell to eliminate redundancy and to streamline their offerings, which will also eliminate the confusion involved with all those plans, too. In addition to ensure fair pricing, CMS is eager to make it easier for patients eligible for Medicare to compare their options by next year.