Medicare is again making news out there. This time the controversy revolves around the efficacy and the validity of employer-based Medicare Advantage Plans. Privately funded, Medicare Advantage Plans offer senior many benefits beyond original Medicare such as dental, vision and hearing services. A retiree may opt to enroll in a private Medicare Advantage Plan of his choice or one supported by his former employer.


According to the CMS, employer-funded Medicare Advantage Plans are not worth the cost. The agency has proposed terminating the bidding process for Medicare Advantage plans run through employers and unions. For the insurance companies this is a great loss in revenue, since the employer-based Medicare Advantage Plan boast a 7.2% profit, higher than the 4.4% profit that individual Medicare Advantage Plans provide.


In part these profits are due to the low competitiveness of employer-based Medicare Advantage Plans. Seniors tend to choose these over other options unlike individual Medicare Advantage Plans that heavily compete to attract clients with lower costs and add-ons in their programs.


It is expected that this policy could save the government and retirees between one and 5 billion dollars over the course of five years. That would be some great savings for everyone involved, and one can only hope that they translate into better services and lower costs for seniors. Experts, however, also predict that this policy will discourage employers and unions from providing Medicare Advantage Plans, leaving their retirees with only individual plans or traditional Medicare plans as their options.