Efforts to restrain Medicare spending recently have focused on Medicare Advantage, a program that provides federal funds to private health plans. Critics charge that the federal government overpays these health plans; as a result, cuts in federal payments are possible.
If funding is cut, Medicare Advantage plans are likely to respond:
* Seniors enrolled in Medicare Advantage plans may have to pay higher fees.
* Medicare Advantage plans, which often offer non-Medicare services such as dental and vision care, could reduce their benefits.
* If neither higher fees nor reduced services are practical, some private plans could drop out of Medicare.
Generally, signing up for Medicare Advantage is less expensive than enrolling in original Medicare and buying a Medicare supplement (“Medigap”) insurance policy (or using FEHB for the same purpose as a supplement). That may not always be the case, though. Seniors should weigh their choices carefully before choosing Medicare Advantage and be ready to move into original Medicare if that option becomes more appealing.
