Original Medicare has traditionally only been offered through the United States federal government, but that may soon change because of the Centers for Medicare and Medicaid Services (CMS) plans to start phase one of testing for the Geographic Direct Contracting Model at the start of 2022. The Geographic Direct Contracting Model, also known as Geo, will allow some private insurance carriers to offer Original Medicare coverage to enrollees. Currently, private carriers are only allowed to offer Medicare Advantage plans, Medicare Supplements, and prescription drug coverage.
What is Geo?
Geo will undergo a six-year testing period starting on January 1, 2022. During this time, four to 10 specified geographic regions will take turns with beginning to offer coverage so that CMS can ensure that the program can be easily monitored. Geo includes successful aspects of the Medicare Shared Savings Program, Next Generation Accountable Care Organization (ACO) Model, Medicare Advantage, Medicaid Managed Care, and commercial health risk-sharing arrangements. By combining the best practices of these five models, CMS hopes that Geo will not only improve the quality of care Medicare offers beneficiaries, but also lower overall health care costs for those over age 65.
How will Geo work?
DCEs will manage beneficiaries’ health care and coverage within specified geographical areas. The contractors may not charge more for Original Medicare coverage than the CMS’s set annual premiums. They may, however, offer reduced costs if beneficiaries choose to use health care providers from within their contractor’s network. Should the contractor maintain low a low cost of care while still following CMS rules and guidelines, it would make extra money. If it were unable to maintain low costs, if would lose money.
DCEs could also offer coupons or vouchers for services and products such as transportation services, condition management programs, vision and dental care, and over-the-counter medications to keep costs down. It is estimated that each DCE could manage the care of over 30,000 beneficiaries.
The main goal of Geo is to see whether private carriers, or Direct Contracting Entities (DCEs), can improve Medicare beneficiaries’ experience while also lowering health care service costs. CMS hopes that the DCEs will be able to offer beneficiaries an array of improved services, including better care, benefit enhancements, lower out-of-pocket expenses, and improved beneficiary protections.
Medicare currently provides health care coverage to over 63 million people over age 65, who have specifically outlined disabilities, or have end stage renal disease. Original Medicare consists of Parts A and B, and is offered by the federal government, whereas Medicare Advantage bundles the two parts and is offered through private companies. For more information about Medicare, check out our story, Medicare Parts A Through D: An overview.
We hope this information on how Geo will allow private insurance carriers to offer Original Medicare is helpful to you.
Empower Brokerage is dedicated to helping you educate your clients on the insurance they need and staying on top of their health. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.