Medicare’s Open Enrollment period is coming to an end on December 7.
Readers of the Medicare Reporter know that I provide carefully-researched information you can use to inform your own Medicare decisions. But because working with Medicare can be so confusing and frustrating, I want to take this opportunity to present you with some revealing information about Medicare Advantage, the private insurance alternative to Medicare.
In this issue I want to make sure you fully understand the pitfalls of Medicare Advantage so you can either stick with traditional Medicare Parts A and B or go into the private option with your eyes open.
Navigating Medicare involves time and effort. It shouldn’t, but that’s a matter for another time. As a result, it pushes many Americans to private insurance brokers and their products — Medicare Advantage insurance. They just don’t feel equipped to make the best decision. What’s more, many make the often erroneous assumption that insurance salespeople know what they’re doing and are acting in the consumer’s best interest.
The Big Mistakes People Make in Medicare—and How to Avoid Them, the Wall Street Journal
In the beginning
Medicare is the health-insurance program run by the United-States government that provides medical coverage to those 65 and over.
While Medicare isn’t perfect, it is quite good. It’s a bargain too. Just try to get comparable coverage on the open market for the rest of your life and regardless of your health. If you find that for $171 a month (the Part B premium in 2024), please share it with the rest of us immediately.
Traditional Medicare lets you see any doctor in the United States that accepts Medicare (the vast majority) even if you don’t live in that geographical area. It doesn’t require a referral to see a primary-care doctor or a specialist, and you’re not confined to a limited network of doctors, hospitals, laboratories, and other healthcare providers.
What’s Medicare Advantage?
First, even though the word Medicare is in the name, it’s not Medicare, it’s private health-insurance. In addition, this private insurance is subsidized by your tax dollars. The same tax dollars that are set aside to fund traditional Medicare are also used to pay private for-profit insurance companies. Plus, Medicare Advantage has become a huge profit center for the insurance industry. Those profits aren’t going back to you, they’re going into the pockets of the insurance industry. How did that happen? You can thank the insurance lobby and Congress.
Medicare Advantage was supposed to save the Medicare system money, but it’s actually costing it more than traditional Medicare.
Here’s how.
Medicare Advantage insurance is required to provide the same benefits as traditional Medicare. To compensate private insurers for taking on that financial obligation, the Federal government pays a fixed amount per year (about $12,000) for every Medicare beneficiary that subscribes to their products instead of traditional Medicare. Sounds fair, right? But when a Medicare Advantage subscriber becomes sick that subsidy goes up. By how much? The number is murky because doctors and insurance companies have a strong incentive to cheat.
One method is upcoding — making a patient seem sicker by coding invoices for more serious illnesses so they can collect a higher fee. And because in the senior demographic people tend to get sicker as they get older, upcoding doesn’t get the scrutiny it needs. Upcoding is just one of many ways insurance companies cheat the taxpayer. Yes, traditional Medicare gets cheated too, but the fact that nearly half of all Medicare beneficiaries are choosing Medicare Advantage makes this a bigger priority. Unfortunately there aren’t enough inspectors to do an effective job and lots of questionable practices go unnoticed.
The Cash Monster Was Insatiable’: How Insurers Exploited Medicare for Billions, the New York Times
The $20 Billion Scam At The Heart Of Medicare Advantage, the Lever
Payments to Medicare Advantage Plans Boosted Medicare Spending by $7 Billion in 2019, the Kaiser Family Foundation
Medicare Advantage insurance is permitted to provide benefits that traditional Medicare doesn’t such as dental and vision care. But when you look at the details, you’ll discover that the dollar amount of dental coverage is quite limited — you’ll be lucky to get a check up and cleaning once a year with an in-network dentist. So if you thought your Medicare Advantage insurance was going to cover those crowns you’ve been putting off, think again. Vision care? Pretty much the same deal.
Medicare and Dental Coverage: A Closer Look, the Kaiser Family Foundation
Dental, Hearing, and Vision Costs and Coverage Among Medicare Beneficiaries in Traditional Medicare and Medicare Advantage, the Kaiser Family Foundation
The $0 premium Medicare Advantage plan
One of the ways Medicare Advantage companies entice people is by offering insurance with a $0 monthly premium. How does this work?
First, even with a $0 plan you still have to pay your monthly Medicare Part B premium ($174.70 in 2024).
But after that, the only way the $0 plan is really $0 is if you never go to the doctor. Otherwise, these are some of the fees you’ll pay even with a $0 plan.
Deductible The amount you pay for covered health care services before your insurance plan starts to pay.
Coinsurance A percentage of medical costs you have to pay once your deductible has been met.
Copayment A flat fee your insurance company charges for a medical service.
All of the above will vary depending on the insurance plan so it’s important to read the policy details and not just the bullet points.
Provider networks
A provider network is a group of doctors, laboratories, hospitals, and other healthcare providers that have a financial arrangement with the insurance company. With Medicare Advantage, all your services are confined to your network. If you see a provider outside the network you won’t be covered.
Why is that bad? Doctors and other health practioners drop out of networks all the time for various reasons. If your favorite doctor was in-network one month, there’s no guarantee he or she will be there the following month, and you may not find out until you’re sitting in the waiting room. In addition, networks have geographical restrictions.
Provider directories
Whether on line or in print your insurance company’s provider directory is rarely up- to-date. So it’s up to the patient to do the work the insurer is getting paid for.
You can try looking at the practitioner’s website or you can phone the doctor’s office, but don’t take just one person’s answer. Office staff are often just as confused as you are. Ask your doctor? Don’t be silly. That’s what they pay the staff to do.
Provider directories are a mess. CMS' plan to fix them has few fans, Modern Healthcare
Drug formularies
A drug formulary is a list of drugs that your Medicare Part D insurance covers and is subject to a co-payment. Most Medicare Advantage insurance includes Part D, but watch those drug lists carefully because they can and do change. And make sure you know that your own drugs are covered and at what level of reimbursement before you choose either a separate Part D plan for use with traditional Medicare or the one included in Medicare Advantage insurance. Remember, Part D is also private insurance.
Why Drugs Are Disappearing From Your Insurance Coverage, the Lever
Drug Makers Agree to Negotiate With Medicare on Prices of 10 Medications, the New York Times
Retirees face significantly higher Medicare Part D prescription drug premiums in 2024. What to know, CNBC
A New Law Limits What Medicare Enrollees Pay for Prescription Drugs. Here's How It Might Cost Them, the Motley Fool
Health-coverage denial
Another tactic used by the Medicare Advantage industry to maximize profit is to deny coverage. Similarly, they’ll create payment delays by going back to the doctor over and over to get additional documentation. It’s one of the many reasons health professionals don’t like Medicare Advantage; it costs them more to have your claim processed than the reimbursement they’ll receive.
Hospitals say Medicare plans ignoring new curbs on coverage denials, Axios
It was stunning': Bipartisan anger aimed at Medicare Advantage care denials, Politico
Artificial Intelligence Is Denying Americans Health Care, the Lever
Small rural hospitals feel pinch as Medicare Advantage plans grow, the Miami Herald
To sum it all up…
Health care is a financial decision, a medical decision, and a peace of mind decision; its impact on you and your family is enormous. Take the time to gather your information, discuss it with your loved ones, and make the decision that works for you. Don’t let anyone tell you otherwise.
And be sure to contact your representative and your senators and tell them to crack down on Medicare abuses of all sorts.