A Warning to Seniors: Beware of Medicare Advantage Plans

Introduction

The television and radio airwaves are clogged with commercials touting the benefits and potential savings of selecting a Medicare Advantage Plan. In the pharmaceutical industry, when a sales representative highlights excerpts from a clinical paper and only talks about the positive things about their drug (its efficacy/effectiveness for example) and they leave out the negative features of that drug (side effects, rate of drug failure), it is called “slanting” the paper. In other words, only telling the positive part of the story and ignoring the pitfalls.

“Slanting” the Paper

That is exactly what insurance companies are doing in their Medicare Advantage Plans’ advertising, they are “slanting” the paper. While it is true that Medicare Advantage Plans can be less expensive in terms of a monthly premium compared to traditional Medicare plus a Medigap Plan, you can wind up a big loser if you happen to get sick. In other words, Medicare Advantage Plans are great as long as you stay healthy and don’t need care choices and options.

HMO’s and Medicare Advantage Plans

Medigap vs Advantage

Before you retired, you may have had company sponsored health insurance options that you chose annually. Usually there was at least a Health Maintenance Organization (HMO) option and a Preferred Provider Organization (PPO) option to choose from. While the HMO option was less expensive, you most likely chose the PPO option for your family because it gave you greater treatment and care options including hospitals, facilities and physicians.

In other words, by limiting your choices as a health care consumer to only those providers that they have negotiated contracts with for lower costs, the HMO can pass on a lower monthly premium…so you are trading your choices and options away in exchange for saving a few dollars of premium each month. The Medicare Advantage Plans are HMO’s limiting your choices and options in exchange for a lower monthly premium.

More on the Downside of HMO’s

Medicare Advantage Plans, as HMO’s, will decide which doctors you can see and they also decide on the type and amount of treatment that you will receive. All treatments must be approved (authorized) in advance of treatment by someone who knows little to nothing about your medical needs and your situation. The private insurance company makes more money by providing you with less options and less treatments.

What is a ‘Health Maintenance Organization – HMO
A health maintenance organization (HMO) is an organization that provides health coverage with providers under contract. A Health Maintenance Organization (HMO) differs from traditional health insurance by the contracts it has with its providers. These contracts allow for premiums to be lower, because the health providers has the advantage of having patients directed to them; but these contracts also add additional restrictions to the HMO’s members.

Read more: Health Maintenance Organization (HMO) http://www.investopedia.com/terms/h/hmo.asp#ixzz4fSiUn3QG

Traditional Medicare and PPO’s

PPO’s provide their customers with a greater choice of options and choices in services, treatments, providers, facilities and physicians. You pay a little more each month, but you can usually keep your existing physicians and go to your local hospital. You can also receive treatment out of your market when you travel around the country. This is generally not the case for a HMO because the HMO’s network is usually local or limited to a certain geography.

Traditional Medicare is essentially a PPO as you are covered across the country, you can choose any physician that accepts Medicare and choose virtually any hospital or treatment facility that accepts Medicare.

What is a Preferred Provider Organization – PPO

A preferred provider organization (PPO) is a type of health insurance arrangement that allows plan participants relative freedom to choose the doctors and hospitals they want to visit. Obtaining services from doctors within the health insurance plan’s network, called “preferred providers,” results in lower fees for policyholders, but the premiums for PPOs are typically higher as a result.

Read more: Preferred Provider Organization (PPO) http://www.investopedia.com/terms/p/preferred-provider-organization.asp#ixzz4fSl7XHIG

More on the Difference Between HMO & PPO

With Traditional Medicare, it is YOU who decides on which doctors and hospitals that you will use for your medical treatment. And it is YOU working with your doctor of choice that will choose the course of treatment for your medical need. In simplest terms, with Traditional Medicare you make choices from a wide array of providers, whereas under Medicare Advantage Plans, you are TOLD who to see and where to go within the limited network.

A Practical Example of Medicare Advantage and Traditional Medicare: Home Health Care Services

Should you need home health care to rehabilitate from a surgery for example, most Medicare Advantage Plans provide very limited benefits such as in home RN visits, Occ therapytherapy visits and most do not offer bath aides to assist with grooming and hygiene during your recovery at home. Traditional Medicare, of course, provides all of the benefits under the Medicare Home Health Benefit.  Further, in a limited HMO network, there may only be one choice of a home health provider regardless of their quality of care and patient outcomes; whereas under Traditional Medicare it is required as part of the regulations that you are offered multiple home health care providers to choose from and it is your right to choose ANY home health provider that you feel will best meet your needs.

What Are Your Coverage Options As a Senior?

There are essentially three (3) coverage choices for seniors after age 65.

  1. Traditional Medicare with co-pays and deductibles.
  2. Traditional Medicare with a Medigap Plan that covers the co-pays and deductibles of Traditional Medicare and also keeps all of your choices and options in your hands
  3. Medicare Advantage which is not Traditional Medicare. It is private insurance that varies greatly depending on what plan you select.

What is a Medigap Plan?

Medicare provides a whole lot of coverage, but it doesn’t cover everything. So some people choose to buy a separate policy to provide coverage for the areas Medicare falls short on. This is known as Medigap insurance. You buy Medigap from a private insurance company.  You can also use your Medigap policy to cover expenses you have under Medicare, such as annual co-pays and deductibles.

Read more: https://medicare.com/medicare-supplement/what-medigap-policies-cover/

What Choice Gives Seniors The Most Comprehensive Coverage?

The best total coverage with the least amount of out-of-pocket costs is choosing Traditional Medicare and adding a Medigap Plan.  There are a variety of Medigap Plans as illustrated below. Adding Medigap Plan F would give a senior the most comprehensive coverage as it would pay all co-pays and deductibles, and even provide some coverage when they travel outside the US. Traditional Medicare doesn’t include a drug benefit, so Medicare Part D would also need to be selected to provide that coverage.

medigap_web

Another Practical Example Why Traditional Medicare Is a Better Choice: Hospice Care

As a terminal disease progresses, the need for the expert management of distressing symptoms and pain control increase. It is during this time that a referral to hospice care should be made by your treating physician or the hospital case manager or social HFatICUworker. The choice of which hospice to choose is a personal matter for the patient and their family and is probably the most important referral and choice that a senior will make.

Typically a family is offered a choice of 3 hospices by a hospital case manager or social worker to interview and make a selection. In the Houston market there are about 100 hospices to choose from and under Traditional Medicare ANY hospice may be chosen by the patient and family.

However, under a Medicare Advantage Plan, you may only have one choice…the hospice that is in the network. Whether that hospice meets your unique needs or not, whether that hospice is a quality provider or not, whether they are even capable of managing your case…that is your only choice.

The Big Picture

Most likely the selection of a Medicare Advantage plan can save you a few dollars monthly in premium savings vs. Traditional Medicare with Medigap (and Part D) Coverage. However, this thought process would be penny wise and pound foolish.

When you are receiving limited and inadequate care with your symptoms poorly managed, what will those savings be worth to you? Remember Medicare Advantage Plans are run by private insurance companies as an HMO and are not Medicare which you have paid for throughout your career. Remember too that large insurers are publicly traded and are more focused on their shareholders and stock price than they are on providing you the care that you need. HMO’s and Medicare Advantage Plans make money by limiting your choices and your care, so while you are paying less you will receive much less than Traditional Medicare.

It is your choice…choose wisely!

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