Anthem has decided to make drastic changes to its California Medicare Advantage plan. Instead of one plan, there will be thirteen of them. The insurer has basically dumped the people who had signed up for what is now the old plan, after sending them letters describing them as “valued customers”.
Medicare Advantage is also called Medicare Part C. It is something that people who qualify for Medicare must purchase from a private health insurance company. In order to get Part C, a person must already be enrolled in both Part A and Part B. The enrollment period for people who want to make changes to their Medicare Advantage plan has already begun.
Anthem has done two things that have affected, and likely confused, all of the California seniors who had Medicare Advantage plans from Anthem. First, they sent out a letter that had lovely, flowery, words in it. People were told that Anthem considered them to be “a valued customer”. The letter said “we look forward to providing you with outstanding service for years to come”.
Two weeks later, Anthem sent out a second letter, to the same customers. This one was labeled “Important Notice”, (two words you never want to hear from your insurance company). The letter explained “Your Medicare coverage is changing.” It went on to say that Anthem Blue Cross would no longer be offering the Medicare Advantage plan in 2012. So much for wanting to provide outstanding service “for years to come”!
Again, this all comes down to money. The federal government reimburses private health insurance companies for some of the costs of the health care that is provided through the Medicare Advantage plans that they offer. Northern California has higher medical costs than other parts of California do. Anthem was losing money.
Private health insurance companies have some restrictions in place regarding the changes that they are allowed to make to their Medicare Advantage plans. In short, this means that Anthem cannot suddenly start charging more for the premiums of this plan for people who live in Northern California, (unless it raises the price for everyone, all across California). The rate has to be the same throughout the state.
To get around this rule, Anthem has decided to terminate the California Medicare Advantage plan that it was offering. It will be replaced with thirteen different regional variations of the plan. Anthem is allowed to set premium rates, and benefits, of these new plans to accommodate for “local conditions”.
For seniors, this means that they will be offered a new Medicare Advantage plan that costs more money than the previous plan did. These plans are going to have “somewhat different benefits”. In general, this is a phrase used by insurance companies when they really mean “less healthcare coverage”. Seniors who do not like this situation will have to find a different insurance company to get Medicare Part C from.
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