Navigating Retiree Healthcare: The Advantages of Medicare Advantage
By: Merrilee Logue, National Labor Office at the Blue Cross Blue Shield Association (BCBSA)
Navigating retirement can be overwhelming – for members and organizations. There are many important items members must consider that will affect how well they retire, with healthcare being primary. For organizations, providing support, education, and great coverage at retirement for their members while saving on costs for both groups and members is a balancing act.
This is an excerpt from NCPERS Summer 2023 issue of PERSist, originally published July 18, 2023.
For organizations who have employees edging towards retirement, the Medicare landscape can be daunting, and the options can seem endless and confusing. Medicare, which is the federal health insurance for anyone aged 65 or older, is comprised of multiple parts: There is Part A, which is the Hospital Insurance, Part B covers doctor and other health care providers' services, and Part D is Prescription Drug coverage. All Parts cover different healthcare components and come at different costs, each of which may be administered separately. The government offers partial coverage for Medicare including Part A and B, but at the end of the day, to keep their existing doctors and health services, some members might find that they need to purchase Medigap to avoid gaps in their coverage.
Medicare Advantage (MA), also known as Part C, is a private insurance alternative to the government-provided Medicare that can provide supplemental benefits and help streamline this process. Rather than worrying about the logistics of administering multiple plans, MA combines Part A and B into one and most often includes Part D. This means that healthcare services can be managed together, making it easier to oversee and track.
Additionally, MA can offer extra services that traditional Medicare does not. For example, some plans might include fitness programs, like gym memberships or discounts, and some vision, hearing, and dental services, like routine checkups and cleanings (vision, hearing, and preventative dental are among the most popular select benefits1). Some MA plans might even cover services like transportation to doctor visits or over-the-counter drugs that Part D doesn't cover.
Medicare Advantage plans may have lower out-of-pocket costs than Original Medicare. With MA, members will need to pay their Part B insurance premium plus a monthly premium. Nationally, the average monthly premium for MA is $161. However, many plans offer options for low or zero-dollar monthly premiums and reduced Part B costs. Ninety-nine percent of eligible enrollees have access to a no premium plan2, with 74% of those people enrolling in no premium plans1. With Medicare Advantage, there also is no need to pay for any type of gap in coverage through Medigap, further lowering the cost.
Just like group health insurance, there are multiple types of plans available as a group, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Private Fee-For-Service (PFFS). Sixty-one percent of MA members enroll in an HMO, with 38% choosing PPOs and 1% PFFs3.
Medicare Advantage plans may be a valuable alternative to original Medicare, both for the organization and the member. MA helps streamline the administration process and provides additional coverage that may make it easier for members to continue getting the care they need. It may be beneficial to explore options to determine if a Medicare Advantage plan is right for your organization.
About the Author: Merrilee Logue is Executive Director of the National Labor Office at the Blue Cross Blue Shield Association (BCBSA), a national federation of 34 independent, community-based and locally operated Blue Cross and Blue Shield companies. Merrilee leads the National Labor Office which is the liaison for unions to ensure that Blue Cross and Blue Shield products meet the labor community's bargaining objectives. In addition, she oversees the NLO Board of Directors which represents 90% of the union members covered by Blue Cross and Blue Shield. Merrilee has spent over 30 years in healthcare concentrating on innovation and strategy to improve the member experience. She earned a bachelor's degree in Secondary Education and a Master's degree in Education Administration from Villanova University.
- Centers for Medicare and Medicaid Services (CMS) Landscape File, 2023
- Centers for Medicare and Medicaid Services (CMS) Enrollment by Plan, 2023
- Centers for Medicare and Medicaid Services (CMS) MA Penetration File, 2023