Medicare Advantage dental subsidies threatened

Sep 23, 2009

Provisions in a U.S. Senate healthcare reform bill might cost some seniors the dental benefits they now receive through a Medicare program.

Under Medicare Advantage, the U.S. government pays private insurers to offer health coverage for seniors -- sometimes including dental benefits -- as an alternative to Medicare. Almost a quarter of Medicare beneficiaries are enrolled in Medicare Advantage, according to the Washington Post.

Under the current law, private insurers bid to offer the same coverage that seniors could obtain through the regular Medicare program. The government sets benchmarks for what this coverage should cost. If the insurer wants to charge more, the beneficiary has to pay that amount.

But if the company charges less than the government benchmark, the government pays the company a bonus that the company can use to reduce cost-sharing, such as copayments, or offer more benefits. An increasing number of companies are using that money to offer dental benefits because more seniors need dental care, according to Atlantic Information Services.

A bill being debated this week in the Senate Finance Committee would reduce what the government pays private insurance companies through Medicare Advantage. And the bill, introduced by Committee Chairman Max Baucus (D-MT), would require the insurers to use the bonus money first to reduce cost-sharing and second to offer prevention plans "such as preventive care visits, smoking cessation programs, and free flu shots."

Only after meeting these requirements could the companies offer additional benefits, such as dental and vision coverage.

The proposed change has upset insurers, who don't want their reimbursement to decrease, as well as some seniors who are worried that the companies will scale back their coverage, according to the Post.