Private Fee for Service Plans Going, Going, Gone

When Medicare Advantage bites the dust there is help for those affected.

This is pretty scary information for seniors. Several of the bigger insurance companies are getting rid of their private fee for service plan completely. While this might not sound like a big deal, it ultimately affects one million seniors by leaving them with no coverage.

The private fee for service plans are run by private insurance companies with money received from the government. The idea behind them was that the insurance companies would handle running these plans much more efficiently than the mainstream Medicare. The private fee for service plans are part of Medicare Advantage, under the knife for serious cuts and in some cases, total elimination in 2010.

The major reason these programs are dropping like flies is that recent legislation drastically affects the dollars allocated for reimbursing physicians. With less money to spend, insurance companies can’t operate programs like this any longer. It boils down to a business decision. No money coming in means no one is able to put money out and stay in business. With the private fee for service plans on the chopping block and Medicare Advantage going away, patients nationwide are scrambling to find health care alternatives.

One very reasonable alternative for seniors is the Medicare supplement policy; something that has been available since the 60s. With due diligence, older Americans are able to get a policy covering bills that Medicare doesn’t pick up. Premiums for Medicare supplement policies are highly competitive right now due to the coming changes in 2010 and the fact that insurance companies are seriously trolling for new business.

Patients in the private fee for service plan do have guaranteed issue provisions that allow them to slip into Medicare supplement policies and avoid the usual underwriting rigmarole. While it may seem like a giant pain to start looking for a replacement policy, now is actually the best time to do so.

One thing that many seniors fail to understand is that all Medicare supplements are the same. They pay the same “approved by Medicare” claims and offer the same benefits. With this in mind it pays to shop around to various insurance carriers and get a “deal” on premiums. It does happen and now is the time to shop and get a bargain.

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