Is there an opportunity for a group retiree plan to benefit from implementing individual Medicare Advantage plans on "list bill" versus a group Medicare Advantage plan? Group Medicare Advantage plans generally cost around $300/month (?) but have no OOP costs other than co-pays. What if individual plans ($0/month premium with a $3900 OOP max) were used instead and an HRA created to reimburse retirees any OOP costs (other than copays). It seems to me that a group could save a significant amount of money. Thoughts?
Group Medicare Advantage Vs. Medicare Advantage List Bill
jdgilbys5,
I am not sure there is a group MA plan that can be offered as a retirement package. There are companies that provide a benefit to their retirees to assist in part if not all the cost of the premium for a med sup, why not an MA with an HSA/HRA? I need to look into that further
I am not sure there is a group MA plan that can be offered as a retirement package. There are companies that provide a benefit to their retirees to assist in part if not all the cost of the premium for a med sup, why not an MA with an HSA/HRA? I need to look into that further
- Thread starter
- #3
brwirt,
Thanks for the reply. Until recently I was not aware of the differences between individual MAPD and group MAPD products. We are quoting a group that currently has a Humana group MAPD for retirees. The employer pays the premium (which we are guessing to be around $300/month). It has a very low OOP max with copays for Drs., ER, lab etc. It also includes enhanced benefits for dental, vision, hearing etc. The group is composite quoted according to their average age and zip code and the proposed plan must be approved by CMS. Anthem will not guarantee implementation of a plan unless it has 90 days to complete all the required steps. Our strategy is to write individaul policies and have the group self-insure for the $3900 OOP max on the individual plans. I am trying to button up any loose ends and to make sure I have not overlooked any potential pitfalls.
Thanks for the reply. Until recently I was not aware of the differences between individual MAPD and group MAPD products. We are quoting a group that currently has a Humana group MAPD for retirees. The employer pays the premium (which we are guessing to be around $300/month). It has a very low OOP max with copays for Drs., ER, lab etc. It also includes enhanced benefits for dental, vision, hearing etc. The group is composite quoted according to their average age and zip code and the proposed plan must be approved by CMS. Anthem will not guarantee implementation of a plan unless it has 90 days to complete all the required steps. Our strategy is to write individaul policies and have the group self-insure for the $3900 OOP max on the individual plans. I am trying to button up any loose ends and to make sure I have not overlooked any potential pitfalls.
The big question to ask is if the carrier is willing to do this. If they are, they can probably walk you through the pitfalls (and advantages) of doing it this way.
Also, many companies want fixed expenses for retirement benefits. Self insuring may sound good on paper, but be prepared for the accounting team to tear it up when looking at it. The risk of this is much lower for the active employees, higher for the retired group. They will probably want statistics to show how much they are likely to spend on the self insured part.
If you could get utilization data for the current group it would help prove (or disprove) the benefit of self-insuring.
Dan
Also, many companies want fixed expenses for retirement benefits. Self insuring may sound good on paper, but be prepared for the accounting team to tear it up when looking at it. The risk of this is much lower for the active employees, higher for the retired group. They will probably want statistics to show how much they are likely to spend on the self insured part.
If you could get utilization data for the current group it would help prove (or disprove) the benefit of self-insuring.
Dan
- Thread starter
- #5
Thanks Dan. I had thought of a worst case scenario situation and how that may cause some trepidation. My reply to the group would be that if their retiree group had a poor claims experience they would still end up paying for that with a very high renewal rate for several years. With the fully funded plan you can never completely reap the benefits of a good year and the insurer will always find a way to recoup their losses over time. With this self funded approach your losses are capped and the potential exists for a very large savings. I can certainly see both sides, just not sure we can sell some very conservative accountants on this tactic.
- 11,995
You can't sell a conservative group on this, it needs to be a very progressive (and patient) account.
Problem is, even with self insuring for the max OOP, that would still reflect a high utilization of the plan, causing almost the same rate increase. Being in California, I'm not as used to utilization affecting future group rates very heavily, I tend not to think about this.
My guess is it will be a tough sale to the accounting team, but if you can win them over and the carrier will accept list billing, you will be in good shape.
Dan
My guess is it will be a tough sale to the accounting team, but if you can win them over and the carrier will accept list billing, you will be in good shape.
Dan
Similar threads
