MEDICARE ADVANTAGE -- SHOULD YOU ENROLL?

Seniors citizens have been calling the office seeking insight on whether or not to enroll in a Medicare Advantage Insurance Plan.  Medicare Advantage is privatized Medicare.  It started in the early eighties as an attempt by the federal government to privatize the Medicare system hoping to significantly reduce the cost of the program.  It is Medicare managed by a private insurance company (Humana, UnitedHealth, Cigna, etc.).  When a person enrolls in a
Medicare Advantage (MA) plan the federal government cuts a check to the insurance company.  To the extent the insurance company can meet the needs of the Medicare beneficiary within the allotted amount paid by Uncle Sam (taxpayer money), the insurance company keeps (profits) the difference.  The incentive and disincentive is easy to follow.

There are pros and cons with the program.  My professional experience with Medicare Advantage can be described with two examples.  An elderly man who received a shingles vaccination at Walgreens last year presented with one of the worst cases of shingles I’ve ever seen.  It covered his left upper back, left
neck, shoulder and extended around to his left upper chest.  He was in pain.  An antiviral medication was prescribed but on presenting the prescription to the pharmacist the patient was told it needed approval (prior authorization) from his insurance company, Humana Medicare Advantage.  A call to Humana resulted in speaking with a person, not a nurse or doctor, who informed me that it would be 24 hours until a decision could be made on the drug’s approval.  This was on a Friday, which meant it would be Monday before being approved, if was to be approved.  Humana of course knew this, and also knew the patient would have to pay out of pocket (saving Humana the cost) for his medication if he wanted to begin treatment right away instead of waiting three days for approval, assuming it was forthcoming.

Another case involved a man with 4 weeks of progressive back pain requiring an MRI to rule out a slipped disc.  He was progressively functionally impaired.  A prior approval was necessary before the MRI could be scheduled and Humana MA
informed us the patient would have to go at least a  total of six weeks before an MRI could be approved.  The person providing this information was not a nurse or doctor but a Humana employee apparently reading from a protocol-based script. Under traditional Medicare the MRI would have been scheduled without a hitch.

Medicare Advantage may be for you if you don’t mind this type of intrusion into your health care.  Medicare Advantage is managed health care, meaning your private insurance company, not the federal government, will be determining whether you receive specifically recommended treatments or tests.  They make
this determination with one eye on the bottom line.  Should your health begin to deteriorate and you incur hospital charges or expenses that begin to threaten their bottom line then you are subject to be released from the program.

There are many anecdotal reports of increasing dissatisfaction with the HMO-style managed care MA plans.  Many plans will send a health provider (usually in the fall) to you under the guise of an “annual exam” but with the real intent being a risk assessment to determine if they should drop you from the policy before the end of the year.   Some people report being dropped off
the MA plan when long-term nursing care or long term physical therapy was required, claiming this type of care is “custodial” and not covered, or it is not “medically necessary”.  Because there are no commonly used criteria as to what constitutes medical necessity, insurers have wide discretion in determining what they will pay for and when they will stop paying for services like skilled nursing care by decreeing it “custodial.”  Generally, MA plans will keep you enrolled as long as you are healthy (and not a threat to the bottom line).

Many MA enrollees are finding that their plans – which offer discounts on gym memberships and hearing aids as an enticement to enroll – are not so willing to cover things like skilled nursing care when they get critically ill.

Subtle deception is present in some ads.  Humana has an ad that suggests you will not have to pay your obligatory 20% of a medical bill.  Two charts are shown, one following the other.  The first shows you paying 20% of the bill with traditional Medicare.  The one following and comparing, favoring Humana, leaves
this out and substitutes ”Easy-to-pay” in its place leaving one with the impression you are not responsible for your 20% share of the bill.

According to the Medicare and Medicaid Research Review when people enrolled in MA plans became critically ill, many realized that the only way they could get coverage for the care they needed – and at a facility of their choice – was to return to the traditional Medicare program.

Also, MA subscribers are usually told the “best” payment method is to have a draft come out of your Social Security payments directly to the MA plan.  If, in the event of critical illness, you are dropped from the plan, it is often difficult to get Social Security to stop making payments to the plan.

Until recently, the federal government was paying to MA insurers 117% of what it costs the government to pay for one traditional Medicare patient.  The 17% overpayment, historically, is what it has taken the feds over time to keep the insurers ‘in the game’ with hope the cost would come down, which it has not.  This 17% overpayment, more or less, is what is being slowly phased out as a
result of the Affordable Care Act (Obamacare), which of course has irked the private MA insurance companies, which stand to lose access to this gravy trough.

Three out of every four Medicare beneficiaries are enrolled in traditional Medicare; one in four are in MA plans.  If you or your parents are thinking an MA plan is for you then you will want to know at least four things:  1) what your out of pocket limit will be 2) what your copay will be 3) what your provider network is 4) and whether you are still obligated to the 20% beneficiary share of a medical bill -- preferably in writing!

Otherwise many people are finding that when they look closely at these programs the better approach is to stick with traditional Medicare, buy a supplement, and a prescription drug plan.  It costs a little bit more, but the overall care is better, your freedom and flexibility is better, your costs are predictable, and it will protect you from bankruptcy.