In January, the Centers for Medicare and Medicaid Services (CMS) announced sanctions against Cigna.
CMS said Cigna was deficient in denying Medicare beneficiaries medical services that should have been covered.
The sanctions will prevent the insurer from enrolling new customers into its Medicare Advantage and Part D prescription drug plans until the problems are corrected.
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Cigna has more than 500,000 Medicare participants enrolled in Medicare Advantage plans, also called Medicare Part C, and it's not the first time CMS has sanctioned a large insurer in this market.
In 2010, Aetna faced similar sanctions and ultimately lost 10 percent of its Part C customers. Judging from these headlines, some clients may conclude that Part C is risky at best, or a scam at worst.
This is not an accurate assessment.
Since it was created by the 2003 Medicare Modernization Act, Part C has become one of Medicare's biggest success stories. Enrollment in Part C has grown from 13 percent of Medicare beneficiaries a decade ago to 33 percent today, according to CMS.
Retired people are attracted to Part C because it can be economical, convenient, and comprehensive in meeting their health needs.
The best way to understand how Part C works is to imagine that Grandma breaks her arm and needs to go to the emergency room.
At the admitting desk, she hands over three health insurance cards: one for Medicare Part A and B enrollment, one for her Medicare Supplemental (Medigap) plan, and one for her Part D prescription drug plan.
However, if she has Part C, she only needs one card issued by a private insurer like Cigna or Aetna. The insurer wraps into one plan all benefits provided by Parts A and B, most benefits provided by Medigap and Part D, and perhaps even more supplemental benefits.
In most cases, the insurer does this at no extra cost beyond the Part B premium that virtually all Medicare beneficiaries pay. This saves the cost of Medigap premiums, which now average $2,196 per year, and the Part D premium of $390 per year (for most people).
As the Cigna case shows, there are huge disparities in the level of benefits and quality of service offered by Part C providers. That's why the most important decisions clients face at age 65 (the age of Medicare enrollment) involve: 1) whether to participate in Part C; and 2) if so, which Part C insurer to choose.
You can help by offering information and advice to support the best decisions.
An important part of the Part C evaluation is the supplemental benefits that many Part C providers now offer, beyond those included in traditional Medicare (Parts A, B and D).
For example, 58 percent of Part C enrollees receive coverage of some dental services not covered by traditional Medicare. Seventy-seven percent receive eye exam coverage and 57 percent qualify for eyewear upgrades.
You can learn more about these benefits, while upgrading your Part C knowledge in general, by downloading an informative new report called Supplemental Benefits Under Medicare Advantage by Christopher Pope of HealthAffairs Blog.
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