Medicare Drug Coverage Option Still Open

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Although the annual Medicare Part D enrollment period has closed, one lesser-known prescription drug coverage option remains open for seniors. The so-called "Medicare Advantage" plans, which were expanded as part of the legislation that created Part D, provide health insurance through private insurers and often include drug insurance.

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"Many seniors are finding that Medicare advantage plans are a great way to control their personal health care costs while on a fixed income. Some of the newer plans are particularly appealing because they offer the cost savings of the old Medicare HMOs, with the flexibility of a Medigap," said Brian Poger, president of Senior Educators, a San Francisco firm specializing in helping the elderly navigate Medicare programs.

In addition, Medicare Advantage may offer a second chance to seniors who have encountered problems with their current prescription drug plan or who are looking for additional health savings in 2007. Most Medicare beneficiaries can sign up for or switch their Medicare Advantage plans through March 31, 2007.

Newer Medicare Advantage plans do not limit or penalize members for choosing their physicians or seeing specialists without referral. Medicare HMOs, which have been around for more than 15 years, provided savings, but traded off patients' freedom to see any doctor. Because they don't require comprehensive networks, the newer Medicare Advantage plans are available in nearly every county across America in 2007.

These Medicare Advantage plans limit financial exposure to people in original Medicare without a Medigap plan and save most people money. According to information from the Center for Medicare and Medicaid Services (CMS), the average senior who switches from original Medicare or Medigap into a Medicare Advantage plan will save an average of $82 per month or about $1,000 a year. Additionally, seniors who are in original Medicare without a supplement will generally be better protected against high medical costs with a Medicare Advantage plan.

"Medicare Advantage offers total health care coverage for Medicare members tailored to a wide range of health needs and individual budgets," Poger said. "This is Medicare for the 21st century."

The Medicare Advantage plans were one of the most important changes to Medicare in 2007, and often costs less than a stand-alone drug plan. Most Medicare beneficiaries have low-priced plans available, which generally include prescription drug coverage in addition to health care benefits.

In 2006, nearly 7 million, or about 17 percent of Medicare beneficiaries were enrolled in Medicare Advantage plans; CMS estimates enrollment will reach 30 percent of beneficiaries by 2013.

"Prescription drugs are definitely not the ‘end-all' when it comes to total senior health costs," said Poger. "Prescription drug costs receive a lot of attention because seniors used have to pay 100 percent of their costs before Part D, but the most expensive part of health care is actually all the services covered under original Medicare, including hospitalization, doctor's visits, testing and skilled nursing. And seniors in original Medicare pay dearly for those costs, either through Medigap premiums or Medicare co-pays."

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