Employers can provide a number of options to help retired employees cover gaps in Medicare health insurance. The three main plan options are group Medicare Part C Advantage (GMA), group Medicare Part C supplement and group Medicare Part D prescription drug coverage.
Group Medicare Advantage can be either preferred provider organization or health maintenance organization plans. Both PPO and HMO plans typically reduce gaps in coverage associated with original Medicare. PPO and HMO plans help retirees retain the same or similar levels of medical coverage you provided before they retired.
The group Medicare HMO plan is more restrictive than the PPO plan, so it could be too limiting for retirees. HMO plans provide coverage for members through a network of locally contracted doctors and hospitals. Such plans generally don’t provide out-of-network coverage except in emergencies. PPO plans tend to offer more flexibility since they provide access to providers nationally in and out of network.
According to the United HealthCare’s website located at www.uhc.com, Medicare Advantage PPO plans offer the following benefits:
Effectively replaces employer plans that combine original Medicare and a Medicare supplement plan.
Combined with a Medicare prescription drug plan, these plans could offer more complete coverage than was available to employees prior to retirement
Allows members to see health care providers in and out of network.
Offers administrative and cost efficiencies to employers and plan sponsors.
In addition to these benefits, group plans can incorporate dental, vision and other coverages. These coverages are either not offered or are usually more limited in individual Medicare supplement (Part C) plans.
Group Medicare Part C supplement plans — also called Medigap plans — offer a number of options depending on the coverages that matter most to the insured.
For example, some plans cover the cost of a doctor’s office visit even if the amount charged exceeds the standard Medicare reimbursement rate Other plans provide a limited coverage amount — about $50,000 lifetime — for medically necessary care when out of the country.
No plan option offers a complete menu of benefits, so choosing wisely is essential. Most group Medicare Part C plans are of the HMO or PPO advantage version. When this plan is offered, it’s often a group version of the Medicare advantage plan offered by such organizations as AARP.
To see plan options, check out the website located at https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies.
As an example of some of the advantages, a plan such as an AARP Medicare supplement plan used as group plans could offer many benefits to retirees:
No network restrictions.
No required referrals.
Multiple plan options.
Coverage and care that’s available throughout the United States. Some plans offer coverage for travel outside the U.S.
Plans are guaranteed for life as long as premiums are paid on time.
Fewer claim forms.
Value-added services, including discounts and more.
Group Medicare Part D prescription drug plans can be offered as part of group Medicare Part C plan or as stand-alone plans. These plans cover many of the gaps in original Medicare parts A and B. In addition, you can often choose a plan that accommodates specific prescription needs for unusual circumstances or combine it with a Part D wrap plan that could provide additional coverage for drugs not eligible under Part D.
Transitioning retirees to a group Medicare Advantage or supplement plan could offer significant cost savings over keeping them on your company’s regular health insurance plan since the average age of employees drives costs. Retirees skew that number higher, affecting everyone on the plan. You can normally subsidize some or all of the cost or even pay the entire premium.
Some health insurance companies could tailor plans for your company. It’s worth asking.