MA plans to limit members’ out-of-pocket expenses

Looking ahead to 2011, beneficiaries enrolled in all Medicare Advantage (MA) plans will find limits placed on their out-of-pocket expenses, and while that sounds like good news, for many MA plans, the limits are quite high. Previously, about half of all MA-PD (Medicare Advantage-Prescription Drug) plans offered some coverage in the drug coverage gap (the “doughnut hole”; see article on Page 36). Between 2011 and 2020, that gap will gradually be filled because of changes enacted in the Patient Protection and Affordable Care Act.

A recent “Medicare Advantage 2011 Data Spotlight” report from the Henry J. Kaiser Family Foundation says that about half of all plans will have limits of $3,400 or less, about the same share as in 2010 (48 percent in 2010 and 51 percent in 2011), but fewer plans will have limits of $2,500 or less (5 percent versus 9 percent) — and considerably more will have higher limits.

Of the MA plans currently available, HMOs will likely have lower limits set on out-of-pocket spending than other plan types.

The report says that 59 percent of Medicare HMOs will have a limit of $3,400 or less, as compared to 41 percent of regional PPOs and 23 percent of private fee-for-service (PFFS) plans. PFFS plans are more likely than other plan types to have limits over $5,000 in 2011.

Nearly half (46 percent) will have limits between $5,001 and $6,700.

NOTE: Excludes SNPs (special needs plans), employer-sponsored group plans, demonstrations, HCPPs, PACE plans, MSAs, and plans for special populations (e.g., Mennonites). Excludes plans sanctioned by CMS. Percentages are unweighted by enrollment. Totals may not add to 100% beause of rounding.

Source for both: Gold M, Jacobson G, Damico A, Neuman T. Medicare Advantage 2011 Data Spotlight, October 2010