FAQ: Medicare Advantage Plan Challenges in Maryland
Summary
What is the main issue with Medicare Advantage plans in Maryland?
Maryland’s unique hospital payment system, where the Health Services Cost Review Commission (HSCRC) sets hospital rates, makes Medicare Advantage more expensive for insurers who pay higher hospital rates but receive lower federal reimbursements compared to other states.
Why are insurance companies considering ending Medicare Advantage plans in Maryland?
The state grant program that helped cover some of the insurers’ higher costs is ending, and without it, companies face continued financial losses due to the disconnect between Maryland’s hospital rate-setting and federal reimbursement calculations.
How many people in Maryland could be affected by these potential plan changes?
About 295,000 Maryland Medicare recipients (under 27% of the state’s 1.1 million Medicare recipients) currently participate in Medicare Advantage plans and could lose their coverage if insurers exit the market.
When might these changes take effect?
Retirees could learn that their current health care plan will no longer be available this fall, with changes taking effect for next year.
What makes Maryland’s Medicare Advantage market different from other states?
Maryland has one of the lowest Medicare Advantage participation rates in the nation (under 27%) compared to most states where at least 50% of Medicare recipients use these plans, due to higher costs and fewer benefits for seniors.
Who is involved in addressing these challenges?
Key stakeholders include insurance providers like CareFirst and Alterwood Health, state officials, the Health Services Cost Review Commission (HSCRC), and organizations like MedChi (Maryland State Medical Society) represented by CEO Gene Ransom.
What additional benefits do Medicare Advantage plans typically provide that retirees might lose?
These plans often provide supplemental benefits such as vision, dental, and transportation assistance that help low-income retirees access comprehensive health coverage beyond basic Medicare.
What was the purpose of the state grant program that is now ending?
The HSCRC offered grants as a temporary fix to stabilize the Medicare Advantage market by helping cover insurers’ costs, with the hope that a permanent federal solution would eventually address the underlying payment system issues.
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