A screenshot from a television ad on Friday for a Medicare Advantage plan from UnitedHealthcare.
Watching the TV ads during the evening news, you would think Medicare Advantage plans were the greatest health insurance bargain ever invented. Consumers should not be fooled, however.
It’s true that the federal Centers for Medicare and Medicaid Services made it possible for Medicare Advantage (MA) health plans to offer more benefits to seniors enrolled in Medicare. Some of these plans offer coverage for vision, hearing, and gym memberships) while not charging a monthly premium, and some MA plans will even pay for seniors’ Medicare Part B premium, said John Barkett, a senior director of policy affairs at the health care consulting firm Willis Towers Watson.
But when shopping for MA plans there are pitfalls for seniors to avoid. Traditional Medicare may not be sufficient because Medicare parts A and B pay for about 80% of one’s costs. “That means some type of additional insurance is worth purchasing,” Barkett said. “If you go on a Part B drug (such as one that requires an infusion in a doctor’s office), paying 20% of that cost could total thousands of dollars a month. And, there’s no out-of-pocket maximum.
“I would even advise healthy people to get either an MA plan or a Medicare supplemental plan, if for no other reason than these plans limit costs if you have a catastrophic event or require expensive maintenance medication,” he added.
One way for seniors to decide whether to enroll in an MA plan is to predict what their expenses might be in the coming year. Predicting health care costs is perilous, however, made more risky by the possibility of a COVID infection. When signing up for an MA plan now, enrollment will begin Jan. 1 and extend for the year. Open enrollment ends Monday.
Bernard J. Wolfson wrote about seniors’ options in a recent article for Kaiser Health News. “For all its complexity and nearly endless options, Medicare fundamentally boils down to two choices: traditional fee-for-service or the managed care approach of Medicare Advantage,” he explained. “The right choice for you depends on your financial wherewithal and current health status, and on future health scenarios that are often difficult to foresee and unpleasant to contemplate.”
Wolfson even covered one of the aspects of Medicare Advantage that doesn’t get covered much and is never mentioned in TV ads. An MA plan could be more expensive than staying in traditional Medicare if the insured senior gets seriously ill or injured, he wrote. In traditional Medicare, the insured person pays for 20% of all costs and those copayments can add up quickly, he noted.
My AHCJ colleagues Cheryl Clark, who covers patient safety, and Liz Seegert, who covers aging, have written about the problems seniors in MA plans face when they get hit with high unexpected health care costs.
“I’m very concerned about the push to move beneficiaries to Medicare Advantage plans because I know so many people who have gotten trapped by them,” Clark said. “After they develop a pre-existing condition, they realize they can’t see the specialist they want or get care in the facility they want. Plus, incurring copays and other charges for medications can push your expenses through the roof.”
In addition, she warned that when these consumers have switched to traditional Medicare and get a Medigap plan to cover the 20% copayments, the Medigap plans will put them through underwriting. Clark explained these problems in two articles she wrote for MedPage Today: Medicare Advantage Enrollees Discover Dirty Little Secret, and Drug Bill Includes Medigap Reforms.
When a plan does underwriting, its actuaries will calculate how much a senior might require in health care costs and rate the premium accordingly. The Affordable Care Act requires health insurers to cover consumers under age 65 even if they have pre-existing conditions. But the ACA does not include such protections for seniors on Medicare and only four states have rules requiring Medigap plans to accept consumers with pre-existing conditions, Clark added.
Seegert agreed, saying, “Most people don’t know about that trap. Instead, consumers get lured by the bells and whistles (gym membership, anyone?) but when it comes time to actually needing good care, they find they’re out of luck because no one bothers to read the fine print.” She covered this topic thoroughly in a post for this blog.