The Texas Medicare supplement is undergoing many changes due to the Patient Protection and Affordable Care Act (PPACA). The major aim of PPACA is the dissolution of the Medicare supplement, or MA. Currently, 47 million people are enrolled in the Medicare program, with 11 million enrolled in MA. The majority of those enrolled in MA are lower income seniors who are working through an insurance company to manage their health care services and broaden their opportunities for care.

With changes in MA due to PPACA, 60% of the people currently enrolled in the MA programs will lose their policies by 2015. Starting next year, in 2012, the number of policies available will be cut from 12, and by 2017, only a few of the policies will be available. Most of those will be Fee For Service, or FFS policies much as the rest of Medicare.

With the traditional framework of Medicare operating in a FFS policy, many doctors are reluctant to accept Medicare. The FFS means that the doctor bills Medicare directly, and waits for reimbursement. However, Medicare, acting as its own insurance company independent of all networks, usually does not deem the physician’s treatments to be as valuable as the doctor does, and therefore does not pay as much as they are billed. This has, historically, resulted in doctors billing even more in an attempt to get a higher percentage of payment that will hopefully come closer to their original fee. The pay-as-you-go nature of the Fee-For-Service insurance policy is, in private insurance circles, the most expensive type of police for all involved.

When Medicare Advantage was first developed, it was more of an HMO plan. For the first time, Texas Medicare supplement recipients were able to choose a health care insurance company approved by Medicare, and participate in discounted services through insurance companies.

The insurance companies bid on Medicare funds, estimating how much they think they will spend of Medicare monies allotted to them. They then work deals with their network providers to furnish various discounts and extended benefits, in return for guaranteed payment.

Medicare has a formula it uses to estimate how much each county in the country will need in Medicare funds. The insurance companies bid within these ranges, and get to keep the overage. This encourages the insurance companies to work the best deals available with their providers, while having to keep their clients happy with proper medical services, as well. After all, with 12 policies available and many approved providers, the client can change policies or providers whenever they want to.

With the changes being made to MA, Texas Medicare supplement recipients will no longer have the choices available to them today. The PPACA rules for county eligibility are also going to be in full effect by 2013, significantly limiting the ability for insurance companies to compete for Medicare monies. The upcoming shift in county eligibility is also expected to leave many urban areas without providers.