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URL:  https://boards.fool.com/bobcatkitty-wrote-i-have-been-hearing-lately-that-30757654.aspx

Subject:  Re: Medicare Part D Question Date:  7/1/2013  12:15 PM
Author:  TwoCybers Number:  18451 of 22849

Bobcatkitty wrote I have been hearing lately that the Medicare Advantage plans are going to changed due to Obamacare. I would check carefully before jumping into one of those right now.

Currently all insurance companies selling Advantage Plans get a capitation equal to 39.4% of the Medicare Premium. The changes you mention are pretty simple - that 39.4% is going to disappear or at least not increase. The reason Advantage plans have been able to offer people things beyond traditional medicare for zero or at most small premiums is the capitation.

Capitation was created during the Bush administration - the thinking was the Private Sector could do it cheaper. Now that 10s of millions have moved to the Advantage plans, maybe it is time to take away the subsidy and watch how fast the Advantage plans fail.

I find it easy to understand people having an interest is any service whose cost is roughly 40% lower than the traditional version of such services.

Gordon
Atlanta
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