During the Presidential campaign, President-elect Obama critiqued Medicare Advantage plans as being a waste of money:
"We right now give $15 billion every year as subsidies to private insurers under the Medicare system," he said during the first presidential debate. "[The system] doesn't work any better through the private insurers. They just skim off $15 billion. That was a giveaway, and part of the reason is because lobbyists are able to shape how Medicare works."
Turns out our President elect was 100% right. Details in a NYT article, Studies Say Private Medicare Plans Have Added Costs, for Little Gain (and in just about 100 other places). Here is the initial press release.
But here's the most important question -- are you, or is someone you know enrolled in a Medicare Advantage plan? If the answer is yes, there is important information you should arm yourself with and you can find it below.
Over the past year or so I have become increasingly interested in our health care system. I've had to deal with some health problems of my own and I've had some interactions with elderly people who are experiencing some of these issues. I felt motivated to do quite a bit of research - I wanted to find the wasteful spending, identify it and try to encourage our Presidential candidate to eliminate it. Well, as it turns out then Senator Obama was a few steps ahead of me. Isn't it nice to have a President-elect who is smarter than us for a change?
So why the focus on Medicare Advantage plans?
The Center for Medicare Advocacy, a non-profit and non-partisan organization that purports to advocate for Medicare beneficiaries provides quite a bit of detail about the misleading information that's floating around out there about Medicare Advantage (MA) plans. I'll put it bluntly - for the vast majority of Medicare beneficiaries, these plans do not save money or provide more coverage. In fact, much of the time these plans actually increase cost and limit coverage. There are some exceptions to this - location really can be everything, but there are many other things to consider when you're trying to determine if a Medicare Advantage plan is the best option for you. The Medicare & You 2009 Handbook actually provides these questions for you, but I would add two incredibly important questions to the list that they provide --
- Do you have doctors you prefer to continue to see? Do those doctors accept the plan you are considering? Does the local hospital accept the plan? (Call your doctors to ask. Do not accept the plan's word on this.)
- Are your prescriptions on this plan's formulary? Do they cost more in one plan versus another? (Compare plans on Medicare.gov's website, or call your local State Health Insurance Assistance Program (SHIP) office.)
Here's what the Handbook suggests:
Your Out-of-Pocket Costs in a Medicare Advantage Plan Depend on the Following:
Whether the plan charges a monthly premium in addition to your Part B premium. Medicare Advantage Plans charge one combined premium for Part A and Part B health coverage, Medicare prescription drug coverage (Part D) (if offered), and extra coverage (if offered).
Whether the plan pays any of the monthly Part B premium (see "Saving on Your Part B Premium" below).
Whether the plan has a yearly deductible or any additional deductibles.
How much you pay for each visit or service (copayments).
The type of health care services you need and how often you get them.
Whether you follow the plan’s rules, like using network providers.
Whether you need extra coverage and what the plan charges for it.
To learn more about your costs in specific Medicare Advantage Plans, contact the plans you are interested in to get more details.
Just above I stated that it wouldn't be a good idea to trust the various plans on information they provide regarding drug/doctor cost and coverage. Center for Medicare Advocacy explains why --
Some of the reported marketing violations include MA representatives who use misleading information or questionable sales tactics to encourage Medicare beneficiaries to sign up for MA plans. For example, marketing agents have told Medicare beneficiaries that there is no premium for a plan, when in fact there is a substantial monthly premium. Some agents have misrepresented the terms and conditions of the MA plan promising that certain physicians participate with the plan when in fact they do not. MA representatives have also enrolled individuals who have serious language barriers or cognitive impairments. Some individuals enroll in an MA plan without understanding that they have switched out of traditional Medicare and into an MA plan. Others knowingly sign up for an MA plan but are not given enough information by the MA plan representative at the time to fully understand the consequences of their enrollment.
Hubert Humphrey famously said in one of his final speeches, "It was once said that the moral test of Government is how that Government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped."
Apparently some people believe that lying to the elderly, the sick, and the needy is perfectly fine - and for each lie told, the private insurance company increases the profit margin (thanks again to your tax dollars).
In my research I've talked to people who were told their doctors were covered by the plan - only to have them enroll and find out they aren't. Months of complaints follow and beneficiaries are sent to collection for medical bills that would have easily been covered by Original Medicare. Just to give you a sense of the typical complaint situation (and no, I'm not exaggerating):
I've talked to the niece of a blind woman and an illiterate man (both over 90) who were signed up for an Advantage plan when someone came to their home. They told him they didn't want to buy what he was selling - he asked them to sign a form so he could verify with his boss that he had been there. A few scribbles and thousands of dollars in denied claims later, their niece finally stepped in to clean up the mess.
I talked with one woman who was signed up for an Advantage plan with drug coverage - with the plan her drugs cost over $1100 each month. When she made the switch to a prescription drug plan where all her drugs were on the formulary, her co-payments for prescriptions (thanks to that plan and Medicaid) were $88 a month.
Another man who spoke Spanish and had a hard time understanding English signed up for a plan because he wanted a "supplement" to Medicare. He ended up in a plan where the nearest doctor covered by the plan was over 100 miles away. He had a stroke and was admitted to the local hospital (also not covered) and was later transferred to a rehab facility (also not covered). He has been a citizen for over 20 years, but when he spoke to the insurance rep who signed him up for the plan (several months later) asking to have his enrollment canceled, he was told that his citizenship could be "taken away" if he tried to switch enrollment outside of the annual enrollment period.
There are countless stories like these. What makes each and every story so awful is that the people being taken advantage of have worked their whole lives hoping that they could have a nice retirement, they have fought in foreign wars, they worked to rebuild our country during and after the Great Depression, etc.
Not only are these plans misleading our Seniors, they are also helping to bankrupt the Medicare trust fund.
From the NYT article cited above:
In a separate article, two analysts from the Medicare Payment Advisory Commission, Carlos Zarabozo and Scott Harrison, said that growth in private plans had driven up costs because the government pays them 13 percent more on average than what it would spend for the same beneficiaries in traditional Medicare.
The commission, an independent federal panel that advises Congress, has expressed concern about the disparity for years.
"The higher payment rates have financed what is essentially a Medicare benefit expansion for Medicare Advantage enrollees, without producing any overall savings for the Medicare program, and with increased costs borne by all beneficiaries and taxpayers," Mr. Zarabozo and Mr. Harrison write.
President-elect Obama has some plans for Medicare, but in the meantime we can help eliminate some of the wasteful spending and we can help beneficiaries find plans that actually provide them the best coverage.
This year's annual enrollment period for Medicare Advantage plans and Prescription Drug Plans is November 15th through December 31st. Medicare beneficiaries need to change plans during this time period. The changes take effect Jan. 1 2009 and unless someone falls under a special exception, that enrollment lasts the entire year. This article from the Great Falls Tribune in Montana actually provides people with some good information - including a reminder that refusing drug coverage when one is eligible for it can incur late penalty costs at a later date - for the rest of one's life. A $2 late enrollment penalty doesn't seem like much for missing one year, but that's $2 every month for the rest of the beneficiary's life. If someone gets the penalty at age 66 and lives to 96, that penalty adds up!
If you know someone with Medicare and they don't know what kind of plan they have, or if the costs are going up for next year, have them visit Medicare's website. Ask your relatives if they need help making a decision this year. Ask them to bring their drug list over and get on the internet with them to locate a drug plan, or a Medicare Advantage plan, otherwise known as a "health plan". Help them look into buying an actual Medicare Supplement plan, known as a Medigap policy (Advantage plans often claim to be supplements to Medicare when they are actually replacements for Medicare). Use the same link to search Medigap policies - learn the differences and look up companies that are offering these policies.
And finally - if you're even the least bit confused, make a phone call to someone who isn't paid commission to sign you up into a plan - call 1-800-Medicare, or call your SHIP office. Ask for someone to help you compare plans. Both services are free - paid for by the Centers for Medicare and Medicaid. Let's help President-elect Obama and the elderly (and our tax dollars) make Medicare a more effective program by helping those we know to find a plan that will help them get good coverage at a lower cost for everyone involved.