Medicare has a long history. We have simplified it for you. Learn
how and why Medicare Advantage was created.
1. Year 1945
- President Harry Truman pushes for a national health plan.
2. Year 1965
- Medicare signed into law.
- Harry Truman is Medicare's first enrollee.
- Generally, Medicare paid 80% of medical bills.
- Medicare Supplement paid 20%.
- Over the next 30 years, Medicare Supplements became very
3. Year 1997
- Balanced Budget Act introduces Medicare Part C (Medicare
Advantage plans). This included HMO's, PPO's, and PFFS's.
- The Medicare HMO (Health Maintenance Organization) is
first to be offered.
- HMO's main advantage? It is very low priced.
- Reason: Government paid a subsidy to the insurance
companies so they can offer low premiums and still pay
- HMO's main disadvantage? Restricted to a small area of
addition, generally only worked well in
4. Late 1990's
- PPO (Preferred Provider Organization) are now offered.
- PPO advantage:
a. Medium premium with a little more freedom of choice.
b. Government still pays a subsidy to the insurance
companies so they can offer lower premiums and
c. The main difference between a PPO and a HMO is that
seniors could now go out of service area but
if they did
they had to pay part
of the bill. Sometimes quite a bit.
- PPO disadvantage? Still restricted to small area of service
and only worked well in populated areas.
5. Year 2003
- PFFS (Private Fee For Service) start being offered.
- PFFS advantages:
a. Very low premium and in MANY cases a ZERO premium.
b. Seniors can go to any doctor, any hospital, anywhere in
the United States that accept the PFFS plan.
c. No restricted areas of service.
d. Great for snow birds or travelers (or anyone that enjoys
total freedom of choice)!
e. Plan pays FULL Medicare benefits.
f. Government also pays a subsidy to the insurance
companies offering these plans, so they can offer lower
premiums and pay claims.
- PFFS disadvantages: None that we can see.
6. Year 2007
- Government makes MA Plans very attractive.
- Government increases payments to insurance companies
offering PFFS plans to about $10,000 per enrollee per year.
- This has allowed some PFFS plans to offer VERY LOW
rates, and in some areas, even offer a ZERO premium.
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