The federal government is laying out the blueprint for Medicare Advantage plans for 2021. The guidelines, which were presented at the end of last year, are essential to saving the program from much-needed change. Beginning in 2020, the number of choices that individuals have available to them within the individual state’s health insurance marketplace will begin to shrink. One in five plans available in states such as California and New York will be eliminated. According to one estimate, these cuts will mean that coverage levels will decline by an average of about 30 percent. As a result, many individuals and families who find themselves with health coverage through their employer or on their own, are finding themselves without any choices at all. They have essentially had their plans dropped. They have no choice but to accept the policies that are offered by their current employer or through a PPO plan.
What does this mean for the remainder of the private insurance companies? It means that they are still being forced to participate in the program even though it’s causing them to lose money. For most of the past decade, this has been the main reason that many private companies have fought to keep them as part of the government-run health care system. They’ve argued that government-run plans are too expensive, too inefficient, and too complex. Since the budget constraints have increased, the fees are soaring as well. Consumers who are enrolled in the Medicare Advantage plans for 2020 will be paying twice the amount that they pay now. This translates into higher premiums, monthly bills, and missed medical appointments.
I don’t believe that any large corporation is making any money on the plans, but that does not mean that the people who own and operate them don’t make money. Their profit margins are higher than ever before. Why? Well, it has nothing to do with increasing coverage. It has everything to do with the fact that they can offer it more aggressively to maximize their profits. They can charge more, because people will find that they have coverage when they need it.Not only will they find it more readily available, but there will be no increase in the cost of prescription drugs. Those who wish to purchase prescriptions online or through mail order will find that they have a better deal than they did under the old plans. The policies will provide them with a better value, too.
Medicare Advantage plans for 2021 increase premiums. they will decrease the number of new enrollees. A decline in new enrollments means less revenue for the companies that pay for Medicare Part B and Part D, the prescription drug programs. It will also mean that government coverage programs are less viable than they were a few years ago.There is nothing wrong with using a government program to help older and younger people who are not in the position to pay full price for coverage. We cannot blame the private companies for offering the Medicare Advantage plans.Insurers are obligated to provide coverage to those who want it. And if they find themselves out of business due to lack of business, there will be ample business available in the private health insurance market.