Medicare is a health insurance program offered by the United States government to cover Americans who are aged 65 years and over plus people living with disabilities. Moreover, people with renal disease and Lou Gehrig’s disease are also covered. The policy was established in 1965. The government uses private and public heath institutions to implement the program. To effectively implement Medicare Advantage (MA) plans, the government licenses the selected institutions after taking thorough considerations and requirements.
The first condition is that the group must have a license from the relevant authorities from the state to prove that it bears a peril as perceived in the licensure. The organization should be in a position to demonstrate the risk that it faces in offering the set benefits under the Medicare plans A and B (Schneider 2005).
It is also required that the state certifies that an institution offering Medicare Advantage plans is suitable to be entitled to bear the risks . However, this is based on the opinions of the state regulatory authorities. An organization can be licensed in a state without many considerations if it has been licensed in another state.
Another requirement is that an institution seeking the MA contract must have a minimum enrolment of 5000 people who directly receive services via the organization in question. This requirement suits urban area and estates where there are large populations. In rural areas, the requirements are that the organization must have at least 1500 people receiving health services through it.
Kronefeld (2011) asserts that the state licensure system applies only to organizations that are in legal practice and prove to be financially needy to effectively handle the risks.it should also offer the required health standards as established by state and national laws. Financially stable firms are not legible to apply for Medicare advantage plans.
Schneider, E. C., Zaslavsky, A. M., & Epstein, A. M. (2005). Quality of care in for-profit and not-for-profit health plans enrolling Medicare beneficiaries. American Journal of Medicine.
Kronenfeld, J. J. (2011). Medicare. Santa Barbara, Calif: Greenwood.