Medicare Advantage part C plans vs. Medicare and a supplement; buyer beware.

You have finally reached the age of 65 and are now enrolled in Medicare; is there a better option?

Medicare was developed in 1965 and signed into law by Lyndon B Johnson as a way to help pay for the medical needs of those reaching retirement age as well as those with disabilities. Medicare Part A is free and is designed to cover hospital stays over 72 hours as well as some skilled nursing care. Medicare Part B is not free, but the monthly premium is subsidized and low, making it affordable for those over the age of 65. This is the coverage you would use when going to the doctor.

In 1997, Medicare Part C was introduced as a way for us to choose a private insurance plan rather than the government’s plan, which at the time was thought to give seniors an alternative insurance that was not government based. In 2003, this was modified and called Medicare Advantage plans (MA).

In 2006, Medicare Part D was introduced, offering a drug benefit to those insured under Medicare. While having a drug benefit was a great idea, unfortunately, there was no vehicle for the government to negotiate drug prices on behalf of seniors and the plans were never given a funding mechanism, which has caused concerns regarding the underfunding of Medicare and a donut hole that leaves seniors exposed to costs after a couple of thousand dollars was covered by Medicare, which is often confusing for most seniors. Under the Affordable care act, the so-called Donut hole will be minimized over time. Currently, the Medicare prescription benefit has a $325 deductible, then required 25% coinsurance payment by the beneficiary of drug costs up to an initial coverage limit of $2,970, then when a person uses $4,750, their coverage again kicks in. You can read about this further on Wikipedia at http://en.wikipedia.org/wiki/Medicare_Part_D.

Medicare A, B, and D are what most people have over the age of 65 unless they decide to choose an Advantage plan. Most seniors find out about advantage plans through a breakfast meeting where a salesperson from the insurance company or through a search on the internet. The pitch is simple, you will pay less when you switch, eliminating the dreaded donut hole and having better coverage, more doctors, etc.

The Problem with Medicare Advantage Plans

Many seniors who are on fixed incomes find this pitch appealing until they decide to use the plans. Recently, a number of our patients have visited our office, only to find out that their Medicare Advantage plan actually covered less, had a higher co-payment and when they factored in the costs, were in fact, cash patients. To be fair, chiropractic coverage under Medicare is currently limited to manipulation, and they do not cover x-rays, exams, or much of the work we perform to get them the great results they desire. While there is hope in the future that Medicare will finally pay for exams and other services, the problem is that the Medicare Advantage plans, often with high co-payments end up paying little or nothing, require paperwork in the form of precertification from the doctor to justify the care the patient will receive. Some patients, with a co-payment of $40 or more actually receive no benefit from the insurer, and since the carrier goes according to Medicare guidelines, they only pay what Medicare pays for, resulting in you paying for almost everything and the insurer paying almost nothing.

In the medical realm, Medicare Advantage plans often use their negotiate fee schedules, which are higher than Medicare, exposing you to potentially higher costs, and smaller networks, since most larger insurers other than Blue Cross Blue Shield are not national. This gives them less negotiating power for both hospitalization and other services, and your choices of medications are almost always generic rather than brand-name medications.

A few years ago, my father, wanting to save some money on a Medicare Advantage plan he signed up for during a breakfast meeting found out that his plan, purchased in New York, had a much higher copayment amount when he visited a doctor in Florida. I had advised him to switch back to Medicare which is accepted almost universally and purchase a Medigap which will cover the deductibles and co-payments.

His experience has vastly improved by having Medicare since he pays less, has better coverage, and has many more choices of doctors and facilities no matter where in the USA he goes. The other benefit is that the donut hole is minimized by his Medigap which pays throughout the donut hole and pays his copayments. Some newer Medigap plans now offer a yearly deductible of your choosing, for a reduced rate. Medicare itself, has a relatively low yearly deductible, low administrative costs, and automatically will bill your secondary insurance for you electronically, eliminating additional work your primary doctor, as well as other doctors and hospitals may require to bill your secondary carrier.

Another reason to choose Medicare is that it is straightforward, does not require precertification for most medical services, and overall, makes going to the doctor easier. Medicare is also at the forefront of developing the idea of the Patient-Centered Medical Home which under NCQA guidelines should ideally improve communication between physicians and the way they coordinate care. The ACO concept pioneered by CMS (Centers for Medicare and Medicaid Services) is another model designed to reduce the cost of medical care in the USA. Fee for service, the traditional way of billing is being discouraged, because it is felt that this method has been used to increase the number of services rather than the quality. While in some cases this is true, both physicians and insurance companies have been complicit in abusing this model, as well as hospitals. Before we have this discussion, we should discuss what a fair cost is for a service provided and the goals for cost-effective management. Perhaps, the United States needs to go back 40 years and return to a time of less specialization, and more primary care services (with a wider definition of what primary services are and who is qualified to deliver them).

In today’s healthcare environment, healthcare providers spending a couple of minutes with a patient, 10 minutes with a computer and sending them out for tests, or other specialists who look at your parts rather than you and how they work together will surely continue to drive costs higher. The current model either leads to medications, more tests or procedures, rather than lifestyle management which is what the public needs. Putting the current model on a diet and maintaining what works poorly is surely going to cost more than it should. When the incentive to evaluate instead of reimburse highly for tests is reversed, doctors will move toward where the money is. Most complex problems require time, and investigation, rather than more specialists, even if they talk to each other. The problems are compounded with hospital protocols where doctors are often brought in to consult, resulting in bill after bill, especially as some do not participate in your network. Since most healthcare providers are in Medicare, you are again less likely to receive bills than if you participate in a Medicare Part C Advantage plan.

Which type of plan you choose is up to you, and the government has given you choices, which of course have been lobbied for by the insurance industry. As a country, we would all be better off with a single-payer Medicare for all plan. The cost would be lower, the network would be huge, and the current idea of consumer plans that create illness by indebtedness after the illness is silly and offensive, especially since there is little transparency on healthcare costs, so people who need the care do not use the insurance or wait until their problem becomes very expensive and life-threatening.

If you have an opportunity to subscribe to Medicare, our recommendation is that this offers the best quality for the cost, while allowing you to visit the doctor you need without insurance companies requiring precertification, higher co-payments, and limiting you to mostly generic medications, which in some cases may not work the same way brand named medications work (this has to do with the way the medication is released into your system, not the formula itself).