October 26, 2009

Eligible Georgia Retirees Switching to Medicare Advantage Plans

Effective January 1, 2010, ALL eligible current and future retirees (and their dependents) that qualify for Medicare will be transferred over to a Medicare Advantage (MA) plan. They will have some choices, but the plans that they will need to enroll in are considered Medicare Advantage with prescription drugs (MAPD) private fee for service (PFFS). This policy change was approved by the Board of Community Health on October 30, 2008.

The changes were announced in a letter from the Georgia Department of Community Health to Medicare eligible retirees in mid-July, but they should also have received an additional letter around the first of October.

The important issue here is that we are currently in the open enrollment period for the plans. Open enrollment started on October 9, and it will end on November 10 - this is also called the Retiree Option Change Period (ROCP).

Drug Benefit - Do Not Forget About It

I am mentioning this first because you are already paying for a prescription drug benefit in this new plan. DO NOT SIGN UP FOR MEDICARE PART D. If you enroll in a separate Medicare Part D plan after you are in the MAPD plan, the Centers for Medicare & Medicaid Services will notify your insurance vendor that you are not eligible for this coverage, and you will lose your SHBP coverage.

What Are My Choices?

There are two companies and two plans for you to choose from -

  • CIGNA Standard Medicare Access Plus Rx
  • CIGNA Premium Medicare Access Plus Rx
  • UnitedHealthcare MedicareDirect Standard Plan
  • UnitedHealthcare MedicareDirect Premium Plan
What Does the Change Really Mean for My Doctors?

It was detailed in July 15th letter that your doctor (provider) would need to accept the changes in the plan to accept the MA terms. From all the research and discussions that I have had with both doctors and insurance vendors, it does not seem like there will be many changes they believe (view the letter with all enclosures by clicking here).

There are no networks. You may see any provider that accepts Medicare and is willing to accept CIGNA/UHC's terms and conditions.

The really important point to make is to have your provider agree to accept the new plan changes (information on the plan was given in the July 15 letter). Along those lines, I have received a few emails talking about the problems with finding Medicare Advantage doctors. Numerous articles have said that the vast majority of doctors will not refuse Medicare or Medicare Advantage from current patients - they wish to continue the relationship. Some doctors may or may not accept new patients, but a study by the Center for Studying Health System Change found that nearly 75% of doctors accepted all or most new Medicare patients in 2008 (Study: Most Physicians Still Accepting Medicare Patients, Fierce Health Finance).

How Much Will This Cost Me?

First, remember that the State of Georgia is subsidizing your coverage by nearly 75% of the total costs. This is one of the benefits that was "given" to you, so if you were to opt out of the MA plan, it will cost you hundreds of dollars per month for the same coverage. In other words, unless you feel like you have no other option and money to burn, opting out is not an option... (who has money to burn??)

The good news about the changes is that it will actually save you money every single month for your coverage. Currently, a PPO covered participant pays $32.90 for single coverage ($142.40 for family). The standard option MAPD PFFS plan will cost $19.30 for single coverage and $38.60 for family coverage (all dependents eligible for MA plan). A mix of eligible and non-eligible Medicare participants in family coverage will have higher costs, but that is to be expected.

The premium coverage option for the MAPD PFFS plan will cost $59.30 for a single and $118.60 for a family (all dependents eligible for MA plan). The benefits here are a lower out-of-pocket maximum, lower hospital costs, reduced co-pays, and a better prescription drug benefit. The choice is yours, but weigh the costs by looking at your 2008 and 2009 medical expenditures. The standard plan could cost you more based on your needs... (Check the July 15 letter above to compare the coverages on the Plan Summary enclosure)

If you want to check out the retiree rates as set by the SHBP, please click this link to open the PDF.

What If I Don't Choose?

According to the information sent with the July 15 letter, "If you are not enrolled in a MAPD PFFS option and do not make an election during the ROCP, your coverage will roll to the MAPD PFFS option of the healthcare vendor you are currently covered. Kaiser members who do not make an election will default to the CIGNA Medicare Access Plus Rx (PFFS) - Standard Plan."


Any change is tough to accept in anything... especially medical coverage. The unknown is more of a worry than the known even when it may be better. In five years, few people may even remember this change unless there are real problems. If that starts to happen though, you can almost be assured that the SHBP and its vendors will try to make things right. The State Health Benefit Plan covered 693,716 people as of September 1, 2009, and that is far too big a number to think that they will just accept mediocre results.

Try to work with your doctors and try to work with the insurance vendors. The vendors are there to help, so let them help. Both CIGNA and UHC told me that if a doctor is not accepting the plan after you discuss it with them, get the vendor involved. They may be able to help explain it from an ease of use and payment perspective. Just a hint the vendors gave me.


Paula Parris said...

Thank you for sharing this information as it will be helpful to many retirees who may not be members of retiree organizations in the state.

I enjoy reading your blog and have found it very helpful.

Paula Parris
SHBP liason for Gwinnett County Retired Educators Association

Robert (Robby) E. Schultz III, CFP®, ChFC®, CPWA® said...


Thank you for your kind words. I hope this information did and does help some people as the plan changes.

If there is anything I can do for your organization or you, please let me know.

Thanks again,