Louisiana’s First Hospital System Creates Medicare Advantage Plan | Business

The Ochsner Health System, based in New Orleans, is the first hospital system in Louisiana to create its own branch of health insurance by selling Medicare Advantage policies.

Ochsner’s Medicare Advantage plans include prescription drug coverage, fitness, dental, hearing and vision coverage. Ochsner bonuses and co-payments start at $ 0. The Medicare Advantage plan is integrated with the health care system, according to the hospital network.

Before deploying statewide, Ochsner wanted to sell plans in the New Orleans and Baton Rouge area, which includes the following parishes: Ascension, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston , Orleans, St. Charles, St. John the Baptist, St. Tammany and West Baton Rouge.

Medicare Advantage plans already offer extras such as dental benefits, vision coverage, or gym memberships that Medicare does not provide. But Medicare Advantage can restrict access to a network of doctors or hospitals. Medicare does not have these restrictions.

Ochsner sees Medicare beneficiaries as a growing market, as more than 11,000 people enroll in Medicare every day across the country. Open registrations for the program began Friday and continue through December 7.

“This allows us to be more holistic in our approach to health care, many Medicare members have issues with billing and collections,” said Warner Thomas, CEO of Ochsner Health. “Administratively, it should be much easier for the coordination between the health plan and the health system. ”

Ochsner doesn’t see the move as a conflict of interest to become both the insurer and the provider.

“There is a lot of waste in the administrative part of health care between providers and plans; being on both sides will free us up more dollars,” said Scott Posecai, CFO of Ochsner.

Statewide, nearly 46% of Medicare beneficiaries in Louisiana have Medicare Advantage plans. There are 426,830 people already enrolled in Medicare Advantage plans in Louisiana.

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In East Baton Rouge parish, nearly 58% participate in the supplementary private insurance program out of 76,859 beneficiaries. In the parish of Orleans, 60% of the 65,136 enrolled were on Medicare Advantage. But at Lafayette Parish, 29% have the additional benefit program on 40,797 plans.

The average monthly premium for a Medicare Advantage plan is around $ 13, about a dollar less than in 2020, and some plans charge no premium. Private plans are already sold by Humana, Aetna and Blue Cross Blue Shield of Louisiana. Humana has the largest market share in the state with over 200,000 customers. Blue Cross Blue Shield has 22,737 members with Medicare Advantage plans in Louisiana.

Hospital-controlled Medicare Advantage plans are not very common, but some systems have adopted them.

About 15% of Medicare Advantage enrollments in Pennsylvania are on a University of Pittsburgh Medical Center plan, and 13% of those enrolled in Maryland have plans with Johns Hopkins.

It wasn’t immediately clear how Ochsner’s plans might impact the insurance market.

“For any Medicare member who selects a Medicare Advantage plan, an important factor in that decision is whether their preferred doctors or other preferred hospitals are networked,” said Meredith Freed, policy analyst at the program. from the Kaiser Family Foundation on Medicare policy.

The Medicare Advantage market is growing and more than a dozen insurers entered the market this year. The Kaiser Family Foundation found that annual gross margins for Medicare Advantage plans were 24% higher in 2020 compared to 2019 and up 31% in 2018.

“These results suggest that Medicare Advantage remains an attractive and profitable market for insurers,” Freed said.

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