Saturday, October 4, 2008

AARP: Does Your Medicare Plan Offer Your Neighbor a Better Deal?

This AARP articles reminds us that there are differences in Medicare Advantage programs and in different communities. These can change annually and we receive mail that suggests we should review our options for the new year. - Bill

Payments to Medicare Advantage plans are determined by a complex formula based on the average amount Medicare has paid for its members in each county over the previous five years. The members’ ages and health conditions, as well as local medical costs, are also taken into account, says Peter Ashkenaz, spokesman for the Centers for Medicare and Medicaid Services.  One reason Medicare’s costs are unusually high in Miami-Dade is because patients there use more medical services on average than their neighbors in other counties. “We don’t know why,” Ashkenaz says.

Medicare Advantage plans in high-paying counties can also offer extra benefits because Medicare gives them rebates. If they bid below the payment rate Medicare sets for a particular county—and Ashkenaz says most do—they can keep 75 percent of the difference as a rebate to use for additional benefits. The rest is returned to Medicare.

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