Can Medicare Advantage Plans Be Self Funded?

Created by the Medicare Modernization Act of 2003, an EGWP can be structured as either a fully insured or self-funded plan and customized to include different deductibles, coinsurance and copay amounts.

How do Medicare Advantage plans get funded?

Three sources of revenue for Advantage plans include general revenues, Medicare premiums, and payroll taxes. The government sets a pre-determined amount every year to private insurers for each Advantage member. These funds come from both the HI and the SMI trust funds.

What is the difference between self insured and self-funded?

The biggest differentiator between the two plans is who assumes the risk for claims. In a fully-insured plan, the risk falls on the insurance company but in a self-funded plan, the person or company assumes the risk by covering the majority of the health claims themselves.