The ABCs of Medicare: Original vs. Medicare Advantage


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Copyright 2007 TheStreet.com, Inc.All Rights Reserved
TheStreet.com

November 26, 2007 Monday 12:01 PM EST

SECTION: PERSONAL FINANCE; TheStreet.com Ratings

LENGTH: 2257 words

HEADLINE: The ABCs of Medicare: Original vs. Medicare Advantage

BYLINE: Donna O'Rourke, Senior Health Analyst.

Donna O'Rourke joined Weiss Ratings, now TheStreet.com Ratings Inc., in 1999, and is the senior analyst responsible for assigning financial safety ratings to health insurers and supporting other health care-related consumer products including Medicare supplement insurance, long-term care insurance and elder care information. She conducts industry analysis in these areas. She has more than 10 years experience in credit risk management and analyses. Previously she served as an assistant vice president at the Union Bank of Switzerland, where she analyzed hedge funds, insurance companies and structured products in support of the derivatives and foreign exchange businesses. She holds a bachelor of science in management from Binghamton University and a master's of science in health systems administration from the Rochester Institute of Technology.

While O'Rourke cannot provide investment advice or recommendations, she appreciates your feedback; click here to send her an email.

Editor's note: This is the first of three stories on Medicare. The second part looks at supplemental insurance, also known as Medigap and the third part looks at prescription drug plans.

It's time to do a Medicare health-insurance review if you or a close relative is 65 or older.

Each year, from Nov. 15 through Dec. 31, you can join, switch or drop your current prescription drug coverage plan. It is also the best time to sit down and review all your coverage.

In this three-part series, I outline the ABCs of Medicare, tell you what has changed and provide some tips to consider.

Stepping Through the ABCs

If you are 65 or over and don't have insurance through your current or former employer you have two choices on how to get health coverage.

Original Medicare, which is managed by the federal government, is broken into Part A (hospital coverage) and Part B (medical/physician coverage). With Original Medicare you can see any doctor, specialist or hospital that accepts Medicare. Original Medicare pays providers 80% of approved amounts so you are on the hook for the remaining 20%, an amount you are unlikely to know ahead of seeing a physician. Also, Original Medicare does not cover all costs so you need to buy supplemental coverage (we discuss this below) to fill in the gaps.

Most people don't pay for Part A coverage, but Part B will cost you a premium of $96.40 per month in 2008. If your modified adjusted gross income is greater than $82,000 (or $164,000 for joint filers) then your premium amount will be adjusted higher. Part B benefits don't kick in until you meet a $135 yearly deductible.

Your other choice is to use a Medicare Advantage plan offered by a private insurer (this is Part C of the Medicare program). You will pay a set co-payment for doctor visits so you will know in advance your cost obligations. On the downside, you will often be limited to a network of providers, and comparing health plans from different insurers is challenging.

Simplicity is one of the main advantages of joining an MA plan. With such a plan you receive more complete coverage so there is no need to buy additional supplemental insurance, including prescription drug coverage.

You'll want to use the tools on this Web site to screen your choice of plans. The Compare Health Plans and Medigap Policies in Your Area link, located toward the bottom of the screen, will allow you to see all the MA plans available in your zip code.

The list also includes some essential information including the monthly premium charge (if any), the estimated annual cost you should expect to pay (including premium and costs not covered by your insurer) and select plan benefit components.

The real meat of the information, though, is available once you click on the plan name. Here you will see contact information, out-of-pocket limits (a key figure), coverage for both inpatient and outpatient care, preventative services and more details on prescription drug, vision and dental benefits.

Narrowing down the ones you want to look at is the tough part. My recommendation is to call your physicians first and find out which plans they take (they will also probably know what plans the local area hospitals belong to).

Unfortunately, the list you first see on the Medicare site is a plan name -- which is a marketing name and not the name of the insurer, which is what your provider will most likely give you.

For instance, when I put in my zip code, one of the plans I find is called Medicare Masterpiece. But when I click on the link, I find the insurer is Universal Healthcare.

(One hint: AARP plans are provided by UnitedHealthcare, a unit of UnitedHealth Group (UNH:NYSE).)

You can find a list of the largest Medicare Advantage providers in each state at the end of this article.

Once you have eliminated the ones your physicians don't accept, you will need to dig into the details to compare cost and coverage among the plans.

Keep in mind that the plan premium amount does not include the Part B premium you have to pay to Medicare. So if the plan charges $19 per month, that is on top of the $96.40 Part B premium deducted from your social security check.

One interesting item: If you use the Compare Health Plans and Medigap Policies in Your Area tool and enter Original Medicare as your current coverage, it will give you the estimated annual cost you will incur. Results for my zip indicated a cost of $4,950 -- approximately $1500 to $2000 more than most of the MA plans listed. The reason is Original Medicare is not complete coverage and therefore it will cost you more to cover the gaps -- which is why you need to purchase supplemental insurance if you are going with Original Medicare. LARGEST MEDICARE ADVANTAGE INSURERS BY STATE (Premiums are in millions of dollars.)

Alabama

Company Name (Domicile State)
Premiums
UNITED HEALTHCARE OF ALABAMA INC
85,412,589
HEALTHSPRING OF ALABAMA INC
71,101,904
VIVA HEALTH INC (AL)
54,802,611
Alaska

Company Name (Domicile State)
Premiums
STERLING LIFE INS CO (IL)
31,327
HEALTHSPRING OF TENNESSEE INC
2,176
Arizona

Company Name (Domicile State)
Premiums
PACIFICARE OF ARIZONA INC (A UNITEDHEALTH GROUP COMPANY)
251,030,986
HEALTH NET OF ARIZONA INC
90,716,139
CIGNA HEALTHCARE OF ARIZONA INC
82,548,320
Arkansas

Company Name (Domicile State)
Premiums
ARKANSAS COMMUNITY CARE INC
8,562,662
STERLING LIFE INS CO (IL)
3,714,066
CARE IMPROVEMENT PLUS SOUTH CENTRAL (AR)
2,991,044
Colorado

Company Name (Domicile State)
Premiums
KAISER FOUNDATION HP OF CO
156,150,969
PACIFICARE OF COLORADO INC (A UNITEDHEALTH GROUP COMPANY)
151,018,229
ROCKY MOUNTAIN HEALTH MAINT ORG (CO)
12,188,774
Connecticut

Company Name (Domicile State)
Premiums
HEALTH NET OF CONNECTICUT INC
106,368,380
WELLCARE OF CONNECTICUT INC
6,563,632
OXFORD HEALTH PLANS (CT) INC (A UNITEDHEALTH GROUP COMPANY)
3,893,751
Delaware

Company Name (Domicile State)
Premiums
STERLING LIFE INS CO (IL)
2,712,471
HEALTHSPRING OF TENNESSEE INC
24,376
DELAWARE PHYSICIANS CARE - MEDICARE
1,837
D.C.

Company Name (Domicile State)
Premiums
KAISER FOUNDATION HP MID-ATL STATES (MD)
10,771,088
AETNA HEALTH INC (A MARYLAND CORP)
152,425
HEALTHSPRING OF TENNESSEE INC
30,439
Florida

Company Name (Domicile State)
Premiums
HUMANA MEDICAL PLAN INC (FL)
747,048,274
CAREPLUS HEALTH PLANS INC (FL)
182,366,006
WELLCARE OF FLORIDA INC
168,601,956
Georgia

Company Name (Domicile State)
Premiums
UNIVERSAL HEALTH CARE INS CO INC (FL)
32,426,981
BLUE CROSS BLUE SHIELD OF GEORGIA (A WELLPOINT COMPANY)
9,885,229
CARE IMPROVEMENT PLUS SOUTH CENTRAL (AR)
6,986,670
Hawaii

Company Name (Domicile State)
Premiums
KAISER FOUNDATION HP INC HI
57,624,108
HAWAII MEDICAL SERVICE ASSOCIATION
18,789,933
ALOHACARE
2,334,690
Idaho

Company Name (Domicile State)
Premiums
BLUE CROSS OF IDAHO HEALTH SERVICE
39,354,862
STERLING LIFE INS CO (IL)
14,594,727
REGENCE BLUESHIELD OF IDAHO INC
5,233,717
Illinois

Company Name (Domicile State)
Premiums
HUMANA HEALTH PLAN INC (KY)
73,400,941
HEALTHSPRING OF TENNESSEE INC
24,075,932
HEALTH ALLIANCE MEDICAL PLANS (IL)
20,125,848
Indiana

Company Name (Domicile State)
Premiums
M PLAN (IN)
6,677,616
ARNETT HMO INC (A UNITEDHEALTH GROUP COMPANY)
6,543,178
ANTHEM INS COMPANIES INC (A WELLPOINT COMPANY)
6,358,431
Iowa

Company Name (Domicile State)
Premiums
WELLMARK INC (IA)
5,782,319
MEDICAL ASSOCIATES HEALTH PLAN INC (IA)
3,816,989
UNITED HEALTHCARE OF THE MIDLANDS (IA)
3,309,638
Kansas

Company Name (Domicile State)
Premiums
HUMANA HEALTH PLAN INC (KY)
20,252,972
COVENTRY HEALTH & LIFE INS CO (DE)
7,106,653
COVENTRY HEALTH CARE OF KANSAS INC (KS)
4,557,727
Kentucky

Company Name (Domicile State)
Premiums
UNIVERSITY HEALTH CARE INC (KY)
29,960,289
ANTHEM HEALTH PLANS OF KENTUCKY INC (A WELLPOINT COMPANY)
26,646,871
STERLING LIFE INS CO (AN AON COMPANY)
6,066,130
Lousiana

Company Name (Domicile State)
Premiums
HUMANA HEALTH BENEFIT PLAN LA
153193269
TENET CHOICES INC (LA)
98051534
STERLING LIFE INS CO (AN AON COMPANY)
27431787
Maine

Company Name (Domicile State)
Premiums
FOX INS CO (AZ)
794,579
MARTINS POINT GENERATIONS LLC (ME)
425,392
ARCADIAN HEALTH PLAN INC (WA)
113,549
Maryland

Company Name (Domicile State)
Premiums
BRAVO HEALTH MID-ATLANTIC INC (MD)
31,504,921
KAISER FOUNDATION HP MID-ATL STATES
19,111,946
AETNA HEALTH INC (A MARYLAND CORP)
10,849,681
Massachusetts

Company Name (Domicile State)
Premiums
TUFTS ASSOCIATED HEALTH MAINT ORG (MA)
213,933,148
BLUE CROSS & BLUE SHIELD MA HMO BLUE
97,634,939
FALLON COMMUNITY HEALTH PLAN (MA)
92,536,265
Michigan

Company Name (Domicile State)
Premiums
BLUE CROSS BLUE SHIELD OF MICHIGAN
138,979,068
HEALTH ALLIANCE PLAN OF MICHIGAN
58,629,169
BLUE CARE NETWORK OF MICHIGAN
19,501,950

Minnesota

Company Name (Domicile State)
Premiums
MEDICA HEALTH PLANS
71,370,583
MEDICA INS CO
56,749,052
BLUE CROSS BLUE SHIELD OF MINNESOTA
14,669,877
Mississippi

Company Name (Domicile State)
Premiums
HEALTHSPRING OF TENNESSEE INC
4,212,288
WELLCARE HEALTH INS OF ARIZONA INC
3,186
Missouri

Company Name (Domicile State)
Premiums
UNITED HEALTHCARE OF THE MIDWEST INC
103,686,140
GROUP HEALTH PLAN INC (A COVENTRY COMPANY)
45,816,110
MERCY HEALTH PLANS OF MISSOURI INC
41,239,709
Montana

Company Name (Domicile State)
Premiums
STERLING LIFE INS CO (IL) (AN AON COMPANY)
13,777,791
NEW WEST HEALTH SERVICES (MT)
2,223,323
BLUE CROSS BLUE SHIELD OF MONTANA
870,178
Nebraska

Company Name (Domicile State)
Premiums
UNITED HEALTHCARE OF THE MIDLANDS
11,707,100
BLUE CROSS BLUE SHIELD OF NEBRASKA
2,752,685
STERLING LIFE INS CO (IL) (AN AON COMPANY)
363,077
Nevada

Company Name (Domicile State)
Premiums
HEALTH PLAN OF NEVADA INC (A SIERRA HEALTH SERVICES COMPANY)
145,115,315
PACIFICARE OF NEVADA INC (A UNITEDHEALTH GROUP COMPANY)
62,800,769
HOMETOWN HEALTH PLAN INC
10,511,524
New Hampshire

Company Name (Domicile State)
Premiums
HARVARD PILGRIM HC OF NEW ENGLAND (MA)
2,954,376
ANTHEM INS COMPANIES INC (IN) (A WELLPOINT COMPANY)
558,365
FOX INS CO (AZ)
126,647
New Jersey

Company Name (Domicile State)
Premiums
HORIZON HEALTHCARE OF NEW JERSEY INC
156,931,261
AETNA HEALTH INC (A NEW JERSEY CORP)
79,251,882
OXFORD HEALTH PLANS (NJ) INC (A UNITEDHEALTH GROUP COMPANY)
49,840,056
New Mexico

Company Name (Domicile State)
Premiums
LOVELACE HEALTH SYSTEMS INC (NM)
52,140,025
PRESBYTERIAN HEALTH PLAN INC (NM)
39,004,578
HCSC INS SERVICES CO (IL) (A HEALTHCARE SVC CORP COMPANY)
1,904,837
New York

Company Name (Domicile State)
Premiums
HEALTH INSURANCE PLAN OF GREATER NY
518,624,364
OXFORD HEALTH PLANS (NY) INC (A UNITEDHEALTH GROUP COMPANY)
276,575,956
EMPIRE HEALTHCHOICE HMO INC (A WELLPOINT COMPANY)
197,495,189
North Carolina

Company Name (Domicile State)
Premiums
PARTNERS NATIONAL HEALTH PLANS OF NC (A BCBS OF NC COMPANY)
95,201,245
UNITED HEALTHCARE OF NC INC
82,224,059
WELLCARE HEALTH INS OF ARIZONA INC
4,255,413
North Dakota

Company Name (Domicile State)
Premiums
NORIDIAN MUTUAL INS CO (ND) (A BCBS COMPANY)
169,209
MEDICA INS CO
98,160
FOX INS CO (AZ)
41,857
Ohio

Company Name (Domicile State)
Premiums
COMMUNITY INS CO (OH) (A WELLPOINT COMPANY)
213,934,621
UNITED HEALTHCARE OF OHIO INC
130,527,886
MOUNT CARMEL HEALTH PLAN INC (OH)
60,343,395
Oklahoma

Company Name (Domicile State)
Premiums
COMMUNITYCARE HMO INC (OK)
51,779,943
PACIFICARE OF OKLAHOMA INC (A UNITEDHEALTH GROUP COMPANY)
46,315,952
STERLING LIFE INS CO (IL) (AN AON COMPANY)
12,059,880
Oregon

Company Name (Domicile State)
Premiums
KAISER FOUNDATION HP NORTHWEST (OR)
96,565,042
PROVIDENCE HEALTH PLAN (OR)
94,843,620
REGENCE BL CROSS BL SHIELD OREGON
73,267,475
Pennsylvania

Company Name (Domicile State)
Premiums
KEYSTONE HEALTH PLAN WEST INC (PA) (A HIGHMARK COMPANY)
536,310,248
KEYSTONE HEALTH PLAN EAST INC (PA) (AN INDEPENDENCE BC COMPANY)
441,428,033
UPMC HEALTH PLAN INC (PA)
139,619,009
Rhode Island

Company Name (Domicile State)
Premiums
BLUE CROSS BLUE SHIELD OF RI
108,330,477
UNITED HEALTHCARE OF NEW ENGLAND INC (RI)
48,293,492
HEALTHSPRING OF TENNESSEE INC
9,113
South Carolina

Company Name (Domicile State)
Premiums
UNIVERSAL HEALTH CARE INS CO INC (FL)
23,852,353
STERLING LIFE INS CO (IL) (AN AON COMPANY)
6,901,387
CARE IMPROVEMENT PLUS SOUTH CENTRAL (AR)
4,855,143
South Dakota

Company Name (Domicile State)
Premiums
WELLMARK OF SOUTH DAKOTA INC
1,393,545
STERLING LIFE INS CO (IL) (AN AON COMPANY)
102,806
FOX INS CO (AZ)
42,016
Tennessee

Company Name (Domicile State)
Premiums
HEALTHSPRING OF TENNESSEE INC
118,628,615
CARITEN HEALTH PLAN INC (TN)
96,386,844
UNITEDHEALTHCARE PLAN RIVER VALLEY (IL)
75,133,825
Texas

Company Name (Domicile State)
Premiums
PACIFICARE OF TEXAS INC (A UNITEDHEALTH GROUP COMPANY)
330,245,398
SELECTCARE OF TEXAS LLC
101,039,883
TEXAS HEALTHSPRING LLC
97,866,085
Utah

Company Name (Domicile State)
Premiums
REGENCE BLUE CROSS BLUE SHIELD OF UT
23,396,441
UNITED HEALTHCARE OF UTAH
7,943,958
UNIVERSAL HEALTH CARE INS CO INC (FL)
5,573,782
Vermont

Company Name (Domicile State)
Premiums
STERLING LIFE INS CO (IL) (AN AON COMPANY)
12,111
HEALTHSPRING OF TENNESSEE INC
4,101
Virginia

Company Name (Domicile State)
Premiums
KAISER FOUNDATION HP MID-ATL STATES (MD)
13,175,458
OPTIMA HEALTH INS CO (VA)
4,055,944
WELLCARE HEALTH INS OF ARIZONA INC
1,660,599
Washington

Company Name (Domicile State)
Premiums
GROUP HEALTH COOPERATIVE (WA)
161,409,275
PACIFICARE OF WASHINGTON INC (A UNITEDHEALTH GROUP COMPANY)
104,842,338
STERLING LIFE INS CO (IL) ( AN AON CORPORATION)
45,040,867
West Virginia

Company Name (Domicile State)
Premiums
COVENTRY HEALTH & LIFE INS CO (DE)
16,676,827
HEALTH PLAN OF THE UPPER OHIO VALLEY(WV)
11,272,373
UPMC HEALTH BENEFITS INC (PA)
3,903,488
Wisconsin

Company Name (Domicile State)
Premiums
BLUE CROSS BLUE SHIELD OF WISCONSIN (A WELLPOINT COMPANY)
57,775,448
UNITED HEALTHCARE OF WISCONSIN INC
41,780,297
SECURITY HEALTH PLAN OF WI INC
33,953,623
Wyoming

Company Name (Domicile State)
Premiums
BLUE CROSS BLUE SHIELD OF WYOMING
82,651
ROCKY MOUNTAIN HEALTH MAINT ORG (CO)
37,531
STERLING LIFE INS CO (IL) (AN AON CORPORATION)
32,952
(Based on premiums as of 3/31/07) Source: tba

LOAD-DATE: December 5, 2007


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