By David Enna, Tipswatch.com
If you watch any news programming on television, you’ve seen annoying ads for Medicare Advantage running year round. “$0 monthly premiums!” “More benefits!” “Call to see if you qualify!”
Medicare Advantage, also called Part C of Medicare, is a private insurance option for covering hospital and medical costs. These plans bundle in Medicare Parts A and B. You will still pay Part B premiums, but the insurer may cover part of those costs. If you have Medicare Advantage, you don’t need a Medigap supplement and probably won’t need a Part D drug plan.
The industry argues that many of these plans offer extra benefits, such as eyeglasses, gym memberships and dental care, not available under original Medicare. That is appealing to a a lot of consumers.
The federal government requires Medicare Advantage plans to cover everything that is covered by Medicare parts A and B, but Advantage plans may have different deductibles and co-payments. In most cases, with Medicare Advantage you can only only use doctors and other providers who are in your plan’s network and service area. And you may need a referral to see a specialist.
Medicare Advantage plans generally lower the monthly cost of Medicare, although total costs can be higher if you need a lot of medical services. The TV ads focus on the lower monthly costs, of course, and the pitch is working. According to KFF, an independent source for health policy research, in 2022 more than 28 million people were enrolled in a Medicare Advantage plan, accounting for 48% of the eligible Medicare population.
Many people are in excellent health when they first sign up for Medicare. Later, when their health declines, the drawbacks of Advantage plans may become apparent. These plans have limited networks of providers, and enrollees going out of network face higher costs.
A Kiplinger article from April 2018 pointed out that enrollees in poor health were substantially more likely to dump an Advantage plan than those in good health.
Medicare Advantage “tends to work for people when they are relatively well,” says Judith Stein, executive director of the Center for Medicare Advocacy. “But if they become ill or injured and really need a significant length of care, they’re not as well served.”
If you are interested in more information on Advantage plans, read the Centers for Medicare and Medicaid Services’s Guide to Understanding Medicare Advantage Plans (.pdf). From that document:
Why are these plans so heavily marketed?
KFF, formerly known as the Kaiser Family Foundation, found in an analysis of 2021 financial data that health insurers report much higher gross margins per enrollee in the Medicare Advantage market than in other health insurance markets.
In 2021, KFF found, Medicare Advantage insurers reported gross margins averaging $1,730 per enrollee, at least double the margins reported by insurers in the individual/non-group market ($745), the fully insured group/employer market ($689), and the Medicaid managed care market ($768).
How does this work? Private insurance companies contract with Medicare to create HMO or PPO plans to cover beneficiaries. Medicare pays Advantage plans a set amount for each enrollee. The amount paid varies by county, and enrollees defined as “sicker” bring in a higher risk-adjusted payment. Medicare Advantage insurers then have a set amount coming in for each enrollee, and if they can keep their patient costs below that number, they can gain a sizable profit.
As of 2019, the typical federal payment to Advantage insurers was about $11,100 per enrollee a year, but that number could vary widely.
In 2019, according to KFF data, the federal government paid Medicare Advantage plans $11,844 per enrollee, or $321 more per person than Medicare would have spent if these beneficiaries had instead been covered by traditional Medicare.
Medicare Advantage insurers obviously have an interest in cutting costs for health care for beneficiaries. Lower costs mean higher profits. These measures might include 1) a limited number of doctors in the plan’s network, 2) co-pays for office visits, 3) c0-pays for specialist visits, 4) requiring approval before the plan covers certain drugs or services, and 5) denying service requests.
High rate of service denials
AARP notes in a comparison of original Medicare and Medicare Advantage that the Advantage plans might resemble your past employer-sponsored plan: “Under Medicare Advantage, you will essentially be joining a private insurance plan like you probably had through your employer.”
In most cases you would have a primary care physician who would direct your care, meaning you would need a referral to a specialist. That request could be denied, and the specialist would have to be in your network. Other medical services — such as chemotherapy or extensive rehab treatments — could also be denied.
KFF issued a report on Feb. 2, 2023, noting that Advantage plans denied 2 million prior authorization requests in 2021, about 6% of all 35 million requests. KFF notes:
Prior authorization is intended to ensure that health care services are medically necessary by requiring providers to obtain approval before a service or other benefit is covered. …
Historically, Medicare beneficiaries were rarely required to receive prior authorization. That is still the case for beneficiaries enrolled in traditional Medicare, who are only required to obtain prior authorization for a limited set of services. However, virtually all Medicare Advantage enrollees (99%) were enrolled in a plan that required prior authorization for some services in 2022. Most commonly, higher cost services, such as chemotherapy or skilled nursing facility stays, require prior authorization. Prior authorization may play a role in helping Medicare Advantage plans reduce costs and maintain profits.
Here is a summary of the report’s finding from 2021 data:
- More than 35 million prior authorization requests were submitted to Medicare Advantage insurers on behalf of Medicare Advantage enrollees.
- Over 2 million prior authorization requests were fully or partially denied by Medicare Advantage insurers.
- Just 11% of prior authorization denials were appealed.
- The vast majority (82%) of appeals resulted in fully or partially overturning the initial prior authorization denial.
KFF concludes:
The high frequency of favorable outcomes upon appeal raises questions about whether a larger share of initial determinations should have been approved. … (M)edical care that was ordered by a health care provider and ultimately deemed necessary was potentially delayed because of the additional step of appealing the initial prior authorization decision, which may have negative effects on beneficiaries’ health.
Thoughts: Original Medicare vs. Advantage?
I’ll admit this is not an area of expertise for me. My wife and I are on original Medicare with Plan G Medigap coverage from UnitedHealthcare. This decision was an easy one because we travel frequently and Plan G includes some overseas coverage. Everything has worked well, so far.
I have no personal experience with Medicare Advantage. But I have heard some horror stories from friends about “out-of-network” doctors and denied services. I am sure many of these insurers are fine and many customers are happy with the lower costs and additional services. Plus, I admit that getting some sort of coverage for dental, hearing and eye glasses would be appealing.
Four things concern me:
- The AARP’s comparison of Advantage plans to employer health insurance — often a bureaucratic mess — gives me pause. I consider original Medicare with a Plan G supplement to be the “near-Cadillac” plan I want. (And up until now, I will admit, I have been paying more for these coverages than I have received in benefits.)
- The intense level of marketing for these Advantage plans indicates they are highly profitable for insurance companies, as the KFF data demonstrate.
- Profits are fine, but there is an inherent conflict of interest for the insurers to deny medical services.
- The “high-ish” level of service request denials means necessary health care could be delayed upon appeal or never received. That’s potentially dangerous, and a hassle I don’t need.
Site reader Jim of the “I Was Retired” YouTube channel has similar views on this topic, which he posted on YouTube in September 2021. There is a lot of good information in this:
What are your experiences with original Medicare or Medicare Advantage? If you are happy with your Advantage plan, or have other opinions, share your thoughts in the comments section below.
Have a great 4th of July holiday.
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
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There is a type of Medicare Advantage Plan (MA) that has not yet been mentioned: the Medicare Medical Savings Account Plan (MSA).
After having had an HSA for 20 years, I looked for the similar MSA when I became eligible for Medicare. It is a special type of Medicare Advantage plan, but none was offered in my area back then. Starting in 2020, I was able to sign up for the MSA offered by Lasso Healthcare. Now in my fourth year, I plan to continue in 2024, assuming it is offered again.
There are two health plan options, both high-deductible. One has a deductible of $5000 and the other of $8000. The deductible is also the max out-of-pocket since 100% of Medicare expenses are covered after reaching the deductible. The savings account part of the offering is held at Optum Bank, including some mutual funds for cash above the amount that must be retained in the cash account. Participants themselves are not permitted to make any contributions to the savings account, but Medicare contributes $2000 or $3000 per year, depending on which plan was chosen.
An MSA is like original Medicare in that there is no network. You are free to go to any provider anywhere who accepts Medicare patients. That makes it a good option for anyone who travels in the US. But since per CMS rules, MSA enrollees are prohibited from purchasing a Medicare supplement, aka Medigap plan, it is not so good for those traveling outside the US.
There is also no drug coverage, but just like with original Medicare, you are permitted to purchase any Medicare Part D drug plan offered in your area.
All health claims are process according to original Medicare rules, so what you owe is limited to Medicare approved payment amounts. For example, my primary care provider billed my annual wellness visit at over $400, but once the procedure codes were adjusted using the Medicare Physician’s Fee schedule, the final cost to me was just under $100. I’ve never reached my annual deductible, in fact I’ve never even used up my annual Medicare contribution, so that money is accumulating for later years when my health situation may not be so good.
I like high-deductible plans since I view health insurance as coverage for catastrophic events. That is not everyone’s cup of tea. I also like have an administrator who negotiates what I pay using Medicare approved amounts.
The main downside to an MSA is that so few providers even know what such a plan is. They often worry about not being in-network, even though there is no network. I just ask them to call the provider hotline and get reassured about the billing process. That may also be a hassle some are not interested in dealing with.
This is fascinating and I have never heard of an MSA. Is it available nationwide?
The Lasso Healthcare MSA plans are available this year in 35 states plus D.C. Notable states missing from the list are California and New York. Other companies may also offer MSA’s, but none are nationwide. Lasso seems to cover the most states and always includes all counties in a given state, unlike Medicare Advantage plans that often are only available in urban areas, leaving rural counties high and dry. BTW, since Lasso Healthcare was acquired in 2022 by Zing Health, it remains to be seen what the 2024 offerings will be.
I’ve been on Medicare Advantage for several years after first buying a supplement from UHC.
Before I went on MA, I checked with my providers/specialists to see if they would take it and all did, as well as if I could switch back to a supplement if I wasn’t satisfied. My primary doctor, who I’ve had for several years after losing mine after 28 years, doesn’t accept Medicare payments, but fills out the insurance forms and I receive about 2/3 of the cost back from MA.
I’m lucky that I get my plan through the Arizona State Retirement System. I have the PPO plan, which only costs me about $100 a month. But it’s the “gold standard” among MA plans. I can self-refer to any doctor in the UHC system anywhere in the country, as well as order tests at a discount. I pay $25 co-pay for specialists and a recent stay at a hospital cost me zero. I was in a private room.
UHC’s plan also offers free memberships with health clubs and many other services, too numerous to mention. Also, my monthly costs have rarely gone up. I pay for a separate dental plan and I would have to pay for an eyeglass plan if I wanted/needed it.
So it depends on what MA plan you get. If only costs me $50 more a month for the PPO plan and it’s well worth it. I haven’t seen an downside with my healthcare insurance, and I’m paying a lot less than when I bought a supplement.
David, what are your thoughts on the huge movements in TIPS yields?
I’ve noticed and I’ve been looking for prime spots for purchases. I hope to post something Sunday morning on this topic.
Nearly 20% of Medicare recipients are dual eligible for Medicare and Medicaid. In 2018 nearly 40% of Medigap enrollees had incomes of less than $40k per year (per a study by Sen. Elizabeth Warren’s office). For most of these folks, the added upfront cost of a Medicare supplement is either impossible or a hardship. They seem to be the target of much of the advertising for Medicare Advantage Plans and the above facts would seem to explain much of the growing popularity of these plans.
I hold no brief for insurance companies but people seem to forget that Medigap plans are sold by the same companies. They may not be as profitable but according to Sen. Warren’s office, they are profitable enough for some insurers to offer lavish incentives to agents. I guess the difference is that the profits are not coming directly out of Medicare but out of the pockets of enrollees who are “upsold”.
“they (Medigap plans) are profitable enough for some insurers to offer lavish incentives to agents”
My Medigap plan costs $44/month (High Deductible G).
It was sold to me by a friend.
His “lavish incentive” was one month’s premium, $44
As far as I can tell, no one on this thread is subject to IRMAA.
No, I am subject to IRMAA (first level) because of Roth conversions. I am sure many others are too. But IRMAA has to be paid whether you are on original Medicare or Medicare Advantage, and that includes the drug plan surchage.
For the IRMAA folks here. If you meet the criteria to have IRRMA waived, like job loss, which can even be retirement, the form to file with Social Security is SS-44. We actually appealed, due to retirement, and the IRRMA was waived.
Whatever Medigap (supplement) insurance company you pick for your Medigap plan check to see how many “closed block of business.” (deadpool) policies the company has.
Deadpool / closed block of business, no longer sells policies to new customers, but service current policy holders. Without new and younger policyholders the yearly premiums could increase higher than other plans.
In most states you will be unable to change supplement insurance companies without medical underwriting. A few states have a birthday rules that allows you to change Medigap plans without medical underwriting around your birthday.
I tried an advantage plan shut it down quick was told by Medicare I was still within the trial window I could join medicare had to purchase a silver script drug plan in doing that step I was automatically enrolled in medicare. What made me leave the advantage plan ASAP
Was there are no USA bases call centers
I spent over an hour on hold passed around to be put on hold yet again. Then sent back to the original intake person who hung up on me called back to a repeat of the first call. First time was India. Second was the Philippines. I called yet again after getting nowhere got a person who I could understand I asked for a USA call number was told we have call centers around the globe. I asked could you give me one in the United States. She said No so I said so there are no call centers in the US? After getting nowhere I called Medicare an joined. Was told when you have an advantage plan you no longer have Medicare. Your money is given to a private insurance company. Was told not everyone realizes this the intake person for Medicare helped me navigate I was lucky. I purchased a medigap policy a plan G. No nonsense
I wrote an extensive article in 2018 about Medigap providers, and while doing that I called the insurance companies to gather information. Several of them did not answer the phone over the weekend. “Our business hours are Monday through Friday, 8 am to 5 pm.” I immediately ruled out those providers. Just FYI, here is that article, which is now totally outdated: https://seekingalpha.com/article/4185050-nearing-65-dont-get-caught-medicares-money-traps
From that SA article:
“If you want comprehensive coverage and travel overseas, choose Plan G over Plan F”
Overseas coverage is identical:
“The Difference Between Plan F And Medigap Plan G Is $226
It really is quite that simple. The difference between F and G is the cost of Part B deductible. Plan G doesn’t cover the Part B deductible (In 2023, it is $226.) After the deductible is met, Plan G benefits are exactly the same as Plan F. Plan F benefits include coverage for all copays, deductibles and coinsurance. This type of coverage has made Plan F extremely popular among seniors on Medicare.”
https://www.medicare.gov/health-drug-plans/medigap/basics/compare-plan-benefits
My point was that Plan G was more cost-effective for the same coverage, given the difference in premiums and uncertainty about future Plan F premiums.
As I am one of the few with experience with both MA and OM plus drug plan, here’s the skinny on prescription coverage.
Under MA plans, generally the free, or cheap copay on lower tier drugs covers drugs that can be gotten cheap anyhow, cash price or using a coupon, like GoodRX. There are sometimes some of the more expensive drugs on the formulary with a decent copay. The more drugs you need (as in sicker patients), the less likely you will find an AP that covers all your meds for low cost.
With OM plus a supplement, plus a drug plan (plan D), we have to play the game designed by Big Pharma – put in the work to find meds at affordable price, or pay dearly. As far as selecting a drug plan, yearly exercise using the drug plan finder on Medicare site.
With both of us being sick, over 20 maintenance meds. There is no drug plan that covers all of our non-generic, higher priced drugs well. Many of us with Plan D rarely use it, instead, we go outside the insurance (get the cheapest drug plan D, so as to not be penalized), using coupons. I check drug prices each and every new or refill prescription. Prices change regularly. Very rarely will our insurance copay be cheaper. I have a whole list of foundations, chain pharmacy cheap drugs lists, coupon websites. Then there’s the Canadian drug mail order pharmacies. I get hubs’ Trelegy Ellipta from a Canadian mail order company, since our drug plans cover it as catastrophic drug. Some of my meds aren’t covered at all, despite there being no generic or even similar drug. Three months’ of Trelegy, coupon price, runs around $1900-$2000. I get three months’ brand drug Trelegy Ellipta from a Canadian mail order pharmacy for $77. Using hubs’ drug plan would throw him in the donut hole almost immediately. When you are dealing with drugs to treat cancer, diabetes, emphysema, heart disease, CKD, high blood pressure, ad nauseum, it is imperative to price shop medications, if one wishes to eat. The people who have a lot of medical issues, take a lot of meds, generally have to learn how to use the system Big Pharma sold to Congress. To avoid a monthly penalty if one needs a Plan D later, choosing to forego it when healthy, gets pretty steep, so many of us get the cheapest drug plan to avoid the penalty. Savvy Medicare recipients with lots of meds aren’t using the drug plans anyhow, just pay for the cheapest plan, pay to play later.
Sorry this sounds so bleak. Part D is the worst part of Medicare.
Yes, this is bleak. I had an experience with CVS (which also owns my Part D insurance company) getting a drug with a retail price of $179, and unfortunately I needed it that day. I had a coupon from the drug maker that said “Bypass Medicare, customer will pay $59.” GoodRX had it for $129. CVS refused to take the coupon. Refused to use GoodRX. “We can’t bypass Medicare.” I paid the $179 and immediately switched pharmacies. Again, there is a conflict of interest in being the drug seller, distributor and insurance company, all at once.
Sorry CVS did that to you, but not at all surprised.
One of the games CVS plays is processing nebulizer meds on Medicare recipients’ Plan D,when nebulized meds generally are processed through Part B. So, when the pharmacist gives you the “copay”, it is a cash price. They will tell you (so,e times) that they cannot bill Medicare Part B, which is generally a lie. If the pharmacy gives flu shots, they are being processed through Part B. I was furious when a CVS pharmacist did that to me, immediately transferred the prescription to the DME provider, who provided the nebulizer. They often are affiliated with their own pharmacy, to handle the nebulized meds. What I believe has happened with nebulized meds is that they have found a way to increase pharmacy profits, by doing this. I am in a lung disease group, and a lot of people were unaware of how their nebulized meds were being processed. A lot of the widows with COPD were thrilled to learn about this. And, FWIW, it was always a CVS pharmacy doing it.
Your comments on CVS prompt me to post. IMO they are among the chief robber barons of the retail pharmacy industry. They hold the prescription mail order contract with our health insurer, and my spouse uses the local store for occasional pick up prescriptions as well. The price differences between the two can be vastly different, and the local store seems to price drugs randomly—e.g. $30 one quarter and $1000+ the next. At times, when questioned, it becomes evident that the pharmacy has made a “mistake”. Other times it appears that the drug has been removed from the “approved” list without notice. I use a different pharmacy, and do not have these problems, although my needs are not as complex.
Some people are posting about good experiences with MA, and some are posting about bad experiences
What I haven’t seen is anyone posting about their bad experiences or regrets over having OM (which of course is possible if you don’t have a supplement – not getting at least a high Deductible Plan G is insanity, you MUST cap your costs)
Reading Jeribelle2000’s experiences (and others) is certainly alarming. But perhaps the most cautionary tale comes from Cheryl FP, the retired RN who dealt with denials and fighting denials on a daily basis. Despite her good health, she said there’s no way she would roll the dice on MA
David pointed out how the cost of his OM, Supplement and Part D is so low compared to the cost of his corporate insurance, he can’t look at it as anything other than a bargain.
I’m with Cheryl and David. I can easily afford the difference between my costs with OM and a supplement vs MA. What I can’t afford is anything avoidable that might even remotely sabotage my care.
What is factual and not anecdotal – MA is draining the Medicare Trust fund in a way that was never supposed to happen. The premise for MA was that it was going to be LESS expensive (“the private sector is always more efficient”), but as David emphasizes, insurers make 2x as much PROFIT on MA as other health insurance plans, and that profit comes out of the Medicare Trust fund.
There’s also the detailed info here about denials of claims. Whether you’ve personally been affected by it or not, those are statistics, not anecdotes.
Every time MA can successfully deny a claim, it goes directly to their bottom line. That is a powerful incentive, and simply not ever an issue with OM.
Although I have Medicare, I am on my wife’s company medical insurance. In a few years, we will be evaluating these options. All the interaction here has been most informative for us. Thanks for the good summary…best!!!!
So let me understand this some people get denied and others don’t for the same coverage? How can that be, every time I call up they are sweet as pie and locally I have a few friends( like 10 or more) that have the same coverage it’s all the same. So I am kinda like an outsider looking in. I know not 1 single person with a horror story other than what I hear on here. Can it be they fixed it in the last 2 years? My max out of pocket is like 3700 for the year. I have dental, hearing, and vision not a great plan but they do pay something. I also have prescription drugs included I have use it. A specialist cost me $25 and most hardcore tests are the same 25 bucks. I recieve OTC items free up to $480.00 a year. I also get a separate debit card for $750 a year to use for my vision, ears and teeth. And I only pay $32.00 a month they take that from my SS. Is this not a good plan where does the fault lie? Again my meds I take 4 different it cost me zero. If I go out of state and get sick I can go to the doctor or hospital and the price is the same as it would be if I was home. I am just saying that is what I have been offered and have accepted. Without issue this plan is working 110%.
Reading these comments has been instructive to me. Some people have excellent Medicare Advantage plans with excellent networks of doctors and responsive administrations. Others don’t, or simply hit a snag in the process, which can be very frustrating or even dangerous when your health is at stake.
With original Medicare + supplement, if Medicare approves the procedure or doctor visit or lab test, it will pay 80% of the cost, assuming all deductibles and co-pays have been met, and the supplement will automatically pay the remaining portion. So Medicare is the deciding entity, not the insurance company.
With a Medicare Advantage plan, the insurer is the deciding entity, using the Medicare guidelines, in theory. But Medicare itself is not involved in the decision. It is up to the insurance company, which has taken over your Parts A and B, to interpret the guidelines and make a decision. In many cases or even most cases, that is fine. In some cases, though, it isn’t fine. If you are having a good experience on Medicare Advantage it indicates you have a good insurer.
This is exactly right. Medicare with Supplement coverage is carved in stone. The few times I dealt with Medicare, the representative was very helpful. Advantage plans are “for profit”, with all the pitfalls and cost-cutting that implies. Those commenters favoring Advantage should tell us if they have had any really bad health issues and how their experience was. It does sound like there are some good Advantage plans, and a lot of bad ones. I don’t have time to shop around and take chances, so I use original Medicare with Supplement Plan F.
We have had both a Medicare Advantage(MA) and Original Medicare with supplement (OM). We first had an MA, knowing we would be relocating to a different state, could then switch to OM with supplement, without going through underwriting (as neither of us could pass underwriting).
Too many issues with the MA delaying and outright denying necessary care. I thought my ten years working for an HMO previously gave me the tools I needed for the MA plan.
Provider directories are often very inaccurate. No punishment levied on insurance companies for large numbers of inaccuracies. Do not trust them. Verify for yourself.
Not all recommended screenings are performed by MA plans. If they aren’t rated on a screening, specifically, you may have a hard time getting the screening. Despite my spouse meeting the American Thoracic Society recommendations, he was denied the yearly low dose CT scan to screen for lung cancer. I was fighting them when we moved. When we moved, switched to OM, one f the first things I got ordered was that lung cancer screening, and bingo, he had lung cancer. Though small, the surgeon said he had it a while, while he was in the MA plan.
I have many other examples of my constant battling through complaint and appeals process (I used to write up the appeals). Will see if this post goes through…
Just wondering how long ago that was? I have never ever been turned down for anything with my Humana advantage. From a EKG to a pulmonary function test, nuclear stress test and so on. My cost is 25 bucks. Even x-rays to the dentist are 100% covered. And I only pay 32 bucks a month they pick up the rest of the tab.
We moved away five years ago. There were other issues, constant denials.
When hubs had a stroke, instead of taking him straight to the OR, he was sent home, to go through outpatient testing, one test at a time, back to the PCP, then another test, then back to the PCP, finally got him in to the cardiovascular surgeon. Took me a full six months of fighting for his care. Ended up he had a 100% blocked left carotid artery. The surgeon was still sweating bullets, when he came to speak with me after he repaired the artery. He couldn’t even get his surgical tool through the closed up artery. Said he didn’t know how the man was still walking around, should have taken him straight to the OR when he had the stroke. Should have investigated it while he was in the ER. The MA plan was gaming the system, betting he would pass away, trying to not pay for the cardio care. He has since had so many artery repairs, stents, patches, I’ve lost count.
So thankful we got out of that awful MA plan. It was a whole lot of work and stress, with me constantly writing up complaints and appeals to get us the standard care we were both needing.
The MA plan also repeatedly denied referral requests for yearly pulmonary function tests, imaging, etc, for my lung disease. The tests are standard care, to monitor disease progression, and treatment. My pulmy told me to get rid of that insurance, as they did not have our best interests at heart. I followed my formula for writing up appeals for denied services, copied the state dept of insurance, sent directly to the MA plan medical director. State got involved, and voila, I was tested, put on the oxygen supplementation I should have been on. They were trying to not test me, as if they did, then they would have to pay for oxygen. And now I have heart damage, from long term low oxygen.
It was an awful situation, until we got out from under that plan.
Sounds aweful very sorry to hear that. Well I am in Florida and like I said before I have never ever had a problem with Humana advantage but I am not going through the issues you are. I have never been denied or had to wait more than 30 days for a special test, and in the last 5 months I have had 6-8 of them. I hope things do get better for you both.
Thank you. Glad you haven’t had issues with your AP. That’s the way one would hope it works.
Sadly, as we got sicker, we got to see the issues with some APs first-hand, which is in line with what the AP detractors point out. Which is why I say to beware.
I have long held that Medicare Advantage plans exist only to placate the health insurance corporate behemoth. Original Medicare proves beyond any doubt that single-payer health care can work in the US (and, no doubt, I have offended someone by nearly saying “socialized”). If you’ve ever had need for health care in a country where it is available to all (I have, while visiting Poland) then you already know how waaaay far behind the US is in relation to the rest of the first world.
I had a triple bypass in nov 22.my zero premium Medicare advantage plan (Highmark BC bs) covered 100% of the costs.I paid nothing ! Ron Erie Pa
Two years ago I selected AARP/United Medicare Plan G coverage and AARP/United Part D coverage after exhaustive analysis and using a good broker to help me wade through the choices. I am a Type2 diabetic and take an expensive medication for my condition. Finding a plan that included this drug at a favorable cost was key. The first year under Medicare did not present any surprises. I am now in the second year and received a notice of a 10% premium increase from United in May. Unexpected to receive a price increase in the middle of the plan year when I can not shop the plan until open season.
Yes, Unitedhealth switched their premium updates to summer; it used to be later in the year, maybe January? Their community pricing means your bill will go up 3% a year until age 77, at the least, plus whatever inflationary pricing they add in. I didn’t like the change to summer, either.
My plan prices update every June as well
I’m 74 and my High Deductible Plan G costs $44/month, capped at that price for the rest of my life (BCBSNC), although I might be subject to an occasional 10% increase
High Deductible Plan G is identical to regular Plan G except that in addition to the Medicare Part B deductible of $226, you are subject to an additional $2700 out of pocket before the plan starts to pay 100% of your Medicare covered expenses.
Since I typically have $400-$600 in out of pocket costs, I’ve come out way ahead on High Deductible G. The one year I blew through the deductible (cervical surgery to replace and fuse 3 vertebrae) I had every possible procedure/test I thought I might need done for free.
Obviously, as I age, the gap in premium between G and high Deductible G increases. So as long as I don’t have medical catastrophes every year, I expect to continue to come out ahead
Mr. Enna: On a different topic, do you have any data on how Treasury.gov handles administration of assets under a trust agreement (upon either the disability or death of the owner)? I hold my Ibonds in the name of a Revocable Trust. I recently revised it & sent copies to Treasury.gov. I’ve never received any acknowledgement, and (as you know) they do not respond to emails. When I have some time to wait on the phone, I plan to call them. It made me wonder what will happen if I become disabled and my successor trustee wants to cash in some of my IBonds. Have any of your readers had experience–especially in the last few years since the Treasury has become so busy with IBond sales–with settling an estate or selling bonds as a successor trustee to a newly-disabled person??? Thank you for any information you can provide. Regards, Patricia
I don’t hold any I Bonds in a trust and so I have no experience with this issue. Possibly other readers can advise you. Calling TreasuryDirect seems like your best option.
All my I-bonds are in a revocable trust. The successor trustee only kicks in if I pass away or become incompetent. If the successor trustee takes over, I assume one of the two has happened. In that case the successor trustee will take over the management of your assets, or immediately distribute them, depending on what you indicate in the trust. That is how I understand it, but you might want to phone your successor trustee and get it from him.
As for I-bond agents, just wait on the phone. Hopefully you will get a little old lady who knows everything about them.
I’m a recently retired Registered Nurse and an avid TIPSWATCH reader. The hours I’ve spent navigating Prior Authorizations and Network issues fighting for my patients made the decision to go with original Medicare easy. Even though I’m in good health, I never considered a Medicare Advantage plan. Saving some money now was simply not worth the gamble of possibly having to deal with a health crisis and an insurance nightmare at the same time.
Excellent feedback, thanks.
75 years young and a satisfied M A zero premium plan participant since 2015! My total out of pocket medical, dental, optical, and drug expenses in almost 8 years is $3950. This includes prostate cancer treatment with 40 IMRT sessions and 5 years of semi annual sessions with an oncologist, three in hospital procedures to stretch my esophagus due to dysphasia, numerous PCP visits, laboratory tests, cataract removals, semi annual dental exams and cleanings, and multiple eye exams and glasses. Fortunately only one prescription taken in this 8 year period. All of this treatment rendered by board certified physicians, dentists, and opthamologists. Also included in my M A plan has been $1280 of over the counter products provided to me of my choosing! No, I can’t use my M A plan at the Mayo clinic in Scottsdale or see a medical specialist in Munich, Paris, Rome, or London but when I needed competent medical care, I received it and recommend M A by UHC to all who are considering.
I appreciate this feedback. Everyone hears when Medicare Advantage does wrong, but it good to hear experiences from satisfied customers.
In Dallas the wife & I are on a UNH MA plan and our premium is $0.00 We’re 69 and if we were on F or G (we could have bought F when we went on MC) it looked like we would be paying $6,000 per year in premiums. We don’t spend hardly anything on doctors. Most of our expenses are prescriptions, what little there is of that. 10 years of that differential is pretty significant unless my assumptions are bad
I am on original Medicare and Plan G. The Part B premium is $164.90 a month x 2 is $330 a month. x 12 that is $3,960 a year. Our plan G with UnitedHealth costs us $285 a month. x 12 that is $3,420. Our Part D costs about $30 a month x 12 = $360. So the annual total is $7,800 for two aging adults. After that, we are on the hook for $452 in costs (Medicare deductible x 2) a year. In reality, compared to the old corporate insurance, this is an amazing bargain.
Dear David – I was surprised, but very happy to see you broach the subject of Medicare Advantage. I am a retired business attorney (and Economics major back in the day) and my wife is a retired commercial insurance senior underwriter for a global insurer. It has been an irritant for years to watch people make the short-view mistake of selecting Medicare Advantage over traditional Medicare, particularly over the best-case pick for everyone who can afford it, namely, traditional Medicare-plus-private-Supplemental Plan G. I won’t recount the many reasons because your sources covered most very well. In a nutshell, Advantage plans are selling low premiums enabled by even lower coverage. Don’t pick just on premium price; pick on cost vs. value received! As was said, it is the fat margins that pay for Medicare Advantage’s constant advertising barrage, and the insured’s total costs with MA are back-loaded while they are relatively steady throughout with Medicare+Plan G. Life is too short to be frustrated and short-changed instead of secure when the big claims begin, which after all is our shared biological imperative.
Sent from Yahoo Mail for iPad
Of the top 10 private Medicare Advantage providers, 8 have been charged by the US Inspector General with Overbilling, 5 have been accused of fraud by the government, and 5 have been accused of fraud by whistleblowers. It seems the “Advantage” belongs to the companies and their shareholders rather than the patient.
Some people are fortunate to have MA plans negotiated by their former employers, who have leverage and oversight not available to individuals.
I suspect that the positive comments about MA are coming from relatively young, relatively healthy folks
I’d like to hear from MA users who have had cancer or other serious, long term illnesses. As the study points out, many people don’t realize the limitations of MA until they need advanced care.
Personally, it’s worth it to me to know that if I need cancer care, I can go to Sloan Kettering or the Mayo Clinic, both of which accept Original Medicare.
In addition to my Original Medicare premium, I pay $44/month for High Deductible G (you’ll never hear about this from an agent because they make so little commission) and $12.70/month for a Part D plan that provides my 3 generics for free.
I’m another happy MA client.
My MA plan is with Kaiser Permanente in Colorado and the care is identical to what I received from KP over 40+ years prior to retirement.
Personally I think many people over-value the option to “choose any doctor” and under-appreciate the value of an integrated system where care is well coordinated across providers.
Totally agree on “I think many people over-value the option to “choose any doctor”
RE: I think many people over-value the option to “choose any doctor”
As someone who very carefully evaluates and selects my doctors, I disagree
And it’s important to me that if I ever develop aggressive cancer I can go to Sloan Kettering or Mayo Clinic and get the best care available in the country (both accept original medicare, but not MA except in rare previous employer negotiated plans)
As a happy Advantage camper, seems this subject comes up frequently. For some reason people like to hate Advantage plans. There’s a behavioral finance bias that “control” may be worth a premium, quite literally in this case. Your mileage may vary–it depends on the plan, either way, Sup or Adv, and plans differ from place to place and insurer to insurer, thanks to individual states governance of the insurance industry.
UHC and Aetna, for example, have both kinds of plans, so would not be very defensible for them to deny coverage on one hand and not the other. Aetna (CVS) here in gulf coast FL has an excellent premier PPO plan–use any doctor you want in or out of network (as long as they accept Medicare assignment, so no balance billing).
The OOP cap is $4900 in network, and $8950 combined in and out. Premium is zero dollars annually. No referral or prior-authorization needed for out of network (just like Supplemental) though smart to check if covered by Medicare and is “medically necessary.”
My health is good so am fortunate that a $8950 cap for catastrophic event coverage is a reasonable tradeoff against zero premium, free tier 1-2 drugs, $2100 reimbursement for any dental expense, any dentist, anywhere in the US annually, $200 for eyeglasses annually, $1250/ear for hearing aids in NationsHearing network (prices in that network trend high so a private provider may be better), $240 annually for over the counter items (CVS!), and world-wide emergency and urgent coverage (but not med-evac). I would need about a 100 office visits at $35 co-pay to cover $3500 annual premium for supplemental and part D coverage. I’ve had three this year so far. As for “control,” I’m not a doctor, though my daughter and son-in-law are, so why would I want “control?” I look at prior-authorization as another way to vet the PCP and specialist’s care plan, a non-medical second opinion (actually it comes from the insurer’s medical dept), more data to consider when things start to go bad.
It’s not really about control. It’s about what kind of health care consumer you are. If you see a doctor twice a week, have a serious chronic condition that requires ongoing care, are frequently hospitalized, etc, then a premium based plan may make the most sense. If you see a doctor infrequently, for your annual checkout and little else, then a high deductible plan with an OOP cap makes sense. It’s important as a senior consumer to understand the different between premium based and high-deductible plans–just as there with Obamacare, and the financial logic for choosing one or the other.
That you may need to get prior authorization for treatment plan should be the least of it either way. If you are sick, an insurer is not going to deny you treatment. They might not pay for gargling with bleach if you have Covid, however. For this we should be grateful that someone with some expertise and experience is looking after things.
The real question you might ask is how private insurers can make money with a $12,000 capitation fee while CMS seems delighted to offload 50 million potential Medicare users at what is obviously a rate below their own cost. We should be talking more about Medicare fraud than pre-authorization, which is one of the processes designed to combat it.
Thank you for these thoughts and the level of detail. I was wary of a high-deductible plan because I am a cheapskate and I don’t want any silly cost barrier getting in my way toward health care. I am also a nerd and I know the dollars don’t add up when you are healthy and using about $500 to $750 of health care a year.
Not sure what cost barrier there is. You either pay up front or you pay as you go. The one risk to consider is that if you develop a serious chronic condition later in retirement that turns you into a big consumer of health care services, you may not get underwriting if you try to switch from Adv to supplemental. What this means is you would need to stay in Adv and might have a number of years, esp towards end of life, where you are paying at the OOP cap, ie $9k a year rather than a $3-4k annual premium plus some small deductibles. IE, over time the premium savings may get paid back in OOP deductibles—it could even out or even cost more in the long run, but you are delaying that eventuality—deferring the cost. Such is the nature of matching the financial strategy with your health and the kind of healthcare consumer you are. The ‘advantage’ of deferring costs is that you may not live long enough for whatever reason to incur them. Or you might get lucky and your heart transplant all happens in one calendar year.
David,
You might consider switching to High Deductible G
I also use about $500 to $750 for heath care a year. High Deductible G saves me hundreds in year when compared to the cost of regular Plan G
My premiums (aged 74) are $4 per month, but my out of pocket is capped at a little under $3000
The cost of being “wrong” (i.e. being better off with regular G) is very small because of the amount of premium I save. I figure I’ve saved between $1,000 and $2,000 by opting for the High Deductible version.
I’ve only blown through the deductible once in my 10 years on Meidcare, when I had surgery to replace and fuse discs in my neck. But some sort of cap is absolutely necessary
It is a math problem and the math probably does work out well for the high deductible version. I have friends that made this exact switch last year after they reached a “certain age” and premiums were getting pretty high.
Especially in NC
BTW, the friend who got me into BCBSNC told me that plan is “portable,” even if I moved from NC to CA FL or NY I could continue the NC plan at NC rates. I’m sure you know that unlike most medical insurance, even Obamacare, Medicare Supplement coverage is identical across companies and states for any specific plan (like G, N etc)
Other agents at his agency never mention High Deductible plans because their only commission is a one time monthly premium, when they could sell you other plans much more profitably (for them)
BCBSNC also lets you move from any BCBSNC supplement plan to another with no medical evaluation
(typo, my rate is $44/month not $4 lol)
On reflection, I’ve saved much more than $2,000 going with High Deductible G vs regular G
And with my BCBSNC plan, my cost is capped at $44 regardless of age
My 107 year old mother-in-law pays less than $40 a month for her High Deductible Plan G. Even if she blew through the deductible every year, she would still be far better off than sky high Plan G premiums at her age
Maximums Amount limit Amount met Amount remaining
Individual Participating Out-Of-Pocket $3,700.00
Thats my max out of pocket for the year. Yes the year. And I only pay 32 bucks a month.
” If you are sick, an insurer is not going to deny you treatment.”
Studies have disproved this. Claims adjusters have received bounties for being able to reject claims
I know a woman who was denied PT she needed by her MA plan despite a dozen letters from her doctor insisting she needed it
It took over a year until she was able to receive treatment
I am extremely fortunate to have a Medicare Advantage Plan administered by United Healthcare and covered by my former employer (the state of Texas) that includes the best of all worlds. Other than my monthly Medicare B premium, I pay no other premiums. Although there is a provider network, I am free to use in-network or out-of-network providers with exactly the same benefits. I am not required to have a PCP and I do not have to get a referral from a PCP to see a specialist. What that means in practice is that I can see any provider I want (as long as they accept Medicare) without a referral and the cost is generally covered at 100% with zero copays and zero deductibles. Of course, not everyone has the option I have. In terms of comparing traditional Medicare with a typical Medicare Advantage plan, I believe traditional Medicare, where a patient can see any doctor they want (as long as they accept Medicare) whenever they want without a referral is the most inefficient and most expensive system to run and the most ripe for fraud. Although it may be inconvenient, I think it makes sense for your PCP to decide if you need to see a specialist or not and to recommend one that they trust. And although people often complain that there is an inherent conflict of interest for the insurers to deny medical services, it’s more complicated than that. When insurance companies deny coverage, those decisions are made by doctors, not by bureaucrats or accountants. My feeling is that probably most of those denials are valid. The insurer has to have a good reason or else they will be sued; it’s not an arbitrary decision. Clearly, there are a tremendous number of medical tests and procedures that are done, drugs that are prescribed, and care that is given that is unnecessary or not backed by sound research (case in point is the over-prescription of opioids.) Patients often have an incentive to ask for services or drugs that may not be necessary if they are covered by insurance. Also, doctors and hospitals have an incentive to provide unnecessary drugs or services because it increases their revenue. Some even resort to outright fraud. Insurers clearly have an incentive to deny coverage for medical services that are unnecessary. It is also in their interest to keep their patients healthy (one reason why they tend to emphasize screenings, vaccines, and other types of preventative medicine.) On the other hand I don’t know if there is much incentive to deny coverage for services that are actually necessary. Aside from being illegal, there is a good chance it will lead to bigger problems and much more expensive medical treatment somewhere down the line. In sum, I think private insurers do a much better job of screening out unnecessary services, waste, and fraud than traditional Medicare does. They can use the money that is saved to provide additional services to their customers beyond what traditional Medicare provides and make a profit as well. In the end, each person has to decide if using a restricted network of providers is worth the extra benefits that Medicare Advantage provides
Another way to look at it: I’m not saying that everyone is motivated solely or primarily by financial considerations, but it is in the financial interest of medical providers to sell you as much as they can. On the other hand, it is in the financial interest of insurers to keep you as healthy as possible so that you need as few services as possible.
It is in the financial interests of insurers to make as much money out of you as possible, whether this involves you being healthy or not.
With a fixed capitation rate, an insurer makes more money if you stay healthy and do not consume healthcare services. If you are sick they want you to get the most effective treatment so they don’t have chronic claims. Large insurers spend significant sums on well fit services, preventive medicine and so on. Aetna sends out wellness info and offers everyday to Adv members. They wouldn’t do this if it wasn’t effective. I’m not an apologist for Aetna or anyone else but these are big businesses with millions of subscribers, so it pays to understand how their business works.
“If you are sick they want you to get the most effective treatment so they don’t have chronic claims”
Your dying promptly, without extended costly care, is an alternative route to maximized profits
If somebody dies or suffers harm because they were denied medical services that they should have received under the terms of their contract (which includes at least everything that traditional Medicare covers) then the insurance company is exposing itself to a HUGE lawsuit. Not exactly a great strategy for maximizing profits.
Insurance company: “We have lawyers for that.”
You make several incorrect assumptions here, the primary one being it’s black or white as to whether “somebody dies or suffers harm because they were denied medical services.” In reality, this can be extremely difficult to prove, since for example, the patient might have died even IF they received the medical services
You might also remember the case of Ford Pintos, where the company calculated it was cheaper to let a few dozen people die than to do an expensive recall.
Here are the FACTS:
“Human Services Office of Inspector General (OIG) found that 13% of the prior authorization denials in a sample from 2019 met Medicare coverage rules and would have been covered if the beneficiary had been in traditional Medicare.
In addition, OIG found that 18% of the provider payment denials in a sample also from 2019 met both Medicare and MA billing rules.”
https://www.medicarerights.org/medicare-watch/2022/04/28/government-watchdog-reports-medicare-advantage-denying-or-delaying-medically-necessary-care
No, I didn’t assume it’s black or white as to whether “somebody dies or suffers harm because they were denied medical services.” What I know is that it is up to an INDEPENDENT review committee or an INDEPENDENT court of law to decide who was right and who was wrong. And if an independent committee or court of law decides that the insurance company was wrong, that insurance company is going to owe big bucks. “If a Medicare Advantage (Part C) health plan makes an adverse reconsideration decision (upholds its initial adverse organization determination), the plan must automatically submit the case file and its decision for review by the Part C Independent Review Entity (IRE).” https://www.cms.gov/medicare/appeals-and-grievances/mmcag/ire
“the plan must automatically submit the case file and its decision for review by the Part C Independent Review Entity (IRE).”
FOR FINAL DECISION on TREATMENT, not compensation
Neither “Independent review committees” nor Medicare can compel compensation
And for lawsuits as David said, the insurance company response is “that’s why we have lawyers”
When you’re avoiding paying on the one out of ten times you lose a case out of the one out of ten times you get sued for denying life saving treatment that costs $hundreds of thousands, The economics are compelling
As for “it never happens with MA” you seem to have managed easily to ignore the statistics quoted in the article and in my response about wrongly denied claims
The IG found It’s COMMON, repeating:
“Human Services Office of Inspector General (OIG) found that 13% of the prior authorization denials in a sample from 2019 met Medicare coverage rules and would have been covered if the beneficiary had been in traditional Medicare.
In addition, OIG found that 18% of the provider payment denials in a sample also from 2019 met both Medicare and MA billing rules.”
And to quote Joel Rett here:
“Of the top 10 private Medicare Advantage providers, 8 have been charged by the US Inspector General with Overbilling, 5 have been accused of fraud by the government, and 5 have been accused of fraud by whistleblowers”
What does that have to do with the topic? We are talking about the care you get between MA and Medicare.
“What does that have to do with the topic? We are talking about the care you get between MA and Medicare”
It has a great deal to do with a possible difference in care
MA insurers derive a direct financial benefit from denying a claim, while Medicare doesn’t. A denied claim can mean the difference between life and death, read Jeribelle2000’s posts.
Per David’s post, MA insurers make 2x as much money per insured than other health insurers. Denied claims contribute to their profit
“When insurance companies deny coverage, those decisions are made by doctors, not by bureaucrats or accountants”
Nope. Made by AI en masse
“Using AI to deny claims without even opening the patient file”
“Medical directors are signing off on denials in less than two seconds”
https://watch.opb.org/video/ai-insurance-1680462114/
It’s not surprising that they use an automated system, but the decisions are based on medical grounds and accepted medical practice – which means research carried out by doctors and scientists and recommendations made by the US Preventive Services Task Force and other highly respected medical groups. The decision has to be based on medical grounds, not financial grounds and it has to be approved by a doctor. Absolutely no evidence in the video that any of the denials were made incorrectly. I think the fact that only o.2% of patients appeal the decision says a lot. Original Medicare, on the other hand, has very little oversight on claims submitted by doctors and other medical providers. As a result, it is estimated that original Medicare loses $60 billion each year due to fraud, errors, and abuse. Guess who is paying for those losses?
“Absolutely no evidence in the video that any of the denials were made incorrectly”
I disagree with the statement “there’s no evidence in the video.”
The video shows denials by AI are based on coding (which is frequently wrong or inadequate) WITHOUT EVEN OPENING THE MEDICAL FILES
“How Cigna Saves Millions by Having Its Doctors Reject Claims Without Reading Them
Internal documents and former company executives reveal how Cigna doctors reject patients’ claims without opening their files. “We literally click and submit,” one former company doctor said.”
This is an IMPORTANT article:
https://www.propublica.org/article/cigna-pxdx-medical-health-insurance-rejection-claims
You’ll find plenty of similar stories (like Jeribelle2000 and others here, and my friend who fought for a year with her doctor’s agreement that she needed PT, with a dozen letters and phone calls, until she finally received treatment)
Seniors in general are loathe to engage in a fight for what they may be entitled to or need. Retired RN Cheryl FP posted here about her battles trying to get denials overturned, which made her decide to stick with OM despite being in good health.
“Cigna said its review system was created to “accelerate payment of claims for certain routine screenings,” Cigna wrote. “This allows us to automatically approve claims WHEN THEY ARE SUBMITTED WITH CORRECT DIAGNOSIS CODES.””
And when they’re not, your SOL, no one looks at your medical file
There are situations, I believe, when the provider provides the wrong code on purpose — this potentially affects both forms of Medicare. You go to have an endoscopy and the anesthesiologist uses the wrong code. Medicare pays everything but the anesthesiologist, saying that wasn’t medically necessary (obviously it was). Anesthesiologist bills you $1,500 hoping you will pay. Ask them to fix the coding. Answer: No. Appeal to Medicare, which then approves the service. Anesthesiologist is paid $100 by Medicare and you owe nothing. Obviously, some doctors have a unique conflict of interest to provide the wrong codes.
My experience working in health insurance was that non-medical employees made the initial denials. When the doctor or patient requested the referral or claim be reviewed, a nurse would review for their guidelines and medical necessity. Sadly, the nurses’ yearly reviews and raises were based on the services and hospital stays they denied. That was before AI.
Aring the marketing literature of insurance companies to be factual. Insurance provider directories can list numerous providers who are not in their networks, sometimes retired, or even deceased physicians, without ever being fined, censored, whatever. I was appalled at the inaccuracies. Like listing Cleveland Clinic, or other prestigious hospitals as contracted, when in fact they were not.
As for the regular screening colonoscopies, I was sent to a colonoscopist gastro. Despite me having several medical conditions affecting my gut, the gastroenterologist told me he only did colonoscopies, that I would have to seek gastroenterology services from the PCP; that was the way the insurance company wanted my medical care. So yeah, you can have that screening, because Medicare evaluates the MA plan on that test specifically. But you can’t receive all other specialist care from their gastro docs.
Good luck on your Medicare choices, peeps. This is too long now, for me to write about Medicare drug plans (Part D). That’s a whole nuther set of things there boy, as they say.
I have original Medicare A and B with a Supplement Plan F (the most expensive). I like it because I never get a bill for anything. All co-pays are paid, I can pick any doctor I want, see any specialist I want anywhere I go in U.S. (even Guam and American Samoa), and I am not restricted to a list of local HMO PPO doctors (most of whom where I live seem to have come from India). You have to decide about quality/prices trade off. The market would say the better doctors will not want to be part of the probably lower paying and extra layers of paperwork with an HMO PPO. The fact that the Mayo Clinic likely only takes original Medicare tells me much. Advantage plans are by definition profit-making businesses, so just think how all businesses cut corners in all sorts of ways to improve the bottom line. Commenters who say they like Advantage and say they are healthy are not exactly the best ones to take advice from, since they have not yet used the Advantage plan when serious health problems kick in.
Realize the medical system in the U.S. is broken. Seeing doctors and going to hospitals is now more dangerous to your health than in the past. You need to find a doctor you trust and who you think is competent, and that, is not easy, because you are not qualified to know whether a doctor is competent or not.
Supplements are interesting because in any given Plan, every provider has to cover exactly the same services, as dictated by Medicare. This is very important. This means you can just use the cheapest of the companies. (Some of the companies have weird names like North Forty Insurance of Burnt Scrotum California. Okay I made that up, but is Mutual of Omaha really much different?)
In California, you have a 60 day window each year to change companies without underwriting. Underwriting is where they ask you a zillion questions about your health to see if you are qualified to buy a Supplement from them. Other states are different. Supplement companies increase prices each year as you age and in general, so it pays to shop around each year. The state has a convenient website where they compare all prices by all Supplement companies by Supplement Plan by zip code, so that makes it easy to find the cheapest. As for Part D, I pay $8.33 a month to Wellcare and they cover every drug I’ve needed so far with just a few dollars co-pay.
Well you must have a lot of money to pay for all of that. I have a friend of mine that pays for all that stuff he at like 400+ a month which I dont understand why. About the only thing he can do is choose his own doctor. He even pays for most of his drugs. To each his own.
I pay $243 a month. But it can get pretty high if you are really old.
Consider switching to High Deductible G (capped for me at $44 regardless of age). The difference is that I have to pay the annual Medicare deductible of $226 plus an additional deductible of $2700 (total $2926) before my Plan pays a penny.
But I pay $2388 less in premiums each year. So my maximum penalty for being “wrong” is $538 a year ($2926 – $2388) whereas potentially, I could come out ahead by $2388 (more realistically in my case, based on my 9 years of Medicare experience, an average of $1600 a year ahead)
And as you recognize, the advantage of my capped premium of $44 looks better against your Plan F premium each year as you age, until sometime in the not too distant future (when your premium increases by $45 a month), I would come out AHEAD regardless of my medical experiences that year.
While coming out ahead by $2926 is unrealistic (compared to a Plan F monthly premium of $285), coming out ahead by $2,000 or even more is very realistic.
I passed the first 5 exams of the Society of Actuaries, and most of the CPCU exams (I ultimately did not stay in the insurance field)
The first rule of insurance is that insurance is for risks you CAN’T afford. The insurance company has overhead and is expected to make a profit. So from a strictly mathematical perspective, you can expect “on the average” to lose money by having insurance. But your utility function requires you to accept that small theoretical loss. Big companies OTOH, often assume much of that risk on the medical plans they offer their employees (i.e. they pay the “overhead” of claims costs to the insurer, but keep all or most of the “profit” that would otherwise go to the insurance company for themselves).
I was surprised in the past, when the NC Dept of Insurance used to carry a consumer accessable database of all Medicare Supplements for all carriers on their website, that annual Plan G premiums were ALWAYS less than Plan F by MORE than the Medicare annual deductible (which is the only difference between the two plans), meaning you were ALWAYS better off with Plan G than Plan F, regardless of the company you chose.
I attribute that to the two factors I mentioned above, but I didn’t expect it to be so obvious.
Plan F has been discontinued and “replaced by” Plan G. I have been grandfathered into Plan F. My simple view is if the government wants to get rid of something, it is not likely to be in favor of the taxpayers. But I also do not want to deal with co-pays, bills, doctor’s billing offices. Also I can afford it.
Advantage, advantage is different in different states. In Florida its great since all major health networks are in. Mayo is a definite no go with Advantage. We spend the savings every year on a nice vacation, does wonders for out health. We have had Ad for about 10yrs. Those premium savings add up. You cannot blame the consumer for taking advantage of a good program. Its a win win, I dont get sick, I keep my money. If the gov cared about cost, we would have universal health care.
This is a very complex issue, which like many of life’s choices needs to be decided on a case-by-case basis. I worked for many years as a volunteer counselor for the State Health Insurance Program (SHIP) in California (where it is known as HICAP), a non-profit Medicare advocacy and advisory service that was created as part of the Omnibus Reconciliation Act of 1990 and is available in every state. SHIP provides cost-free, unbiased advice to Medicare recipients.
I completely agree that a Medicare recipient who spends a large portion of each year away from their primary home should probably choose Original Medicare plus a supplemental Medigap plan and a stand-alone Part D plan, because if you become seriously ill outside of your Medicare Advantage Plan’s service area receiving and coordinating care can get complicated. Also, anyone with a rare or unusual chronic condition may prefer Original Medicare.
Original Medicare does provide enrollees with more choice, but sometimes that choice is an illusion, because finding a specialist close to your home willing to accept a new patient without a referral from a primary care physician can be difficult. Also, understanding and dealing with billing is more complicated under Original Medicare, since Medicare, your Medigap plan, and your Part D Plan are all billed separately. This can be especially confusing for enrollees as they age and begin to have problems with executive function, including dementia. In general, Medigap plans are “attained age rated” and so become more expensive with age. The downside of not being required to obtain prior authorization is that a service may be deemed as “not medically necessary” after it is performed and payment can then be denied by Medicare (if Medicare doesn’t pay, then your Medigap plan won’t pay, either).
Medicare Advantage (MA) plans can be very good, but you have to shop around and in general stay with a reputable company that has been in business for a while. Choose a plan that includes your preferred primary care physician; in general, your PCP would refer you to specialists within their medical group anyway as these are colleagues with whose expertise they are most familiar, and with whom they have a working relationship. If you don’t like an MA plan you have the opportunity to drop it and return to Original Medicare without going through medical underwriting during the first 12 months of your enrollment.
MA plans quality ratings depend in part on how successful they are at getting enrollees to take advantage of preventive and screening services, which is one reason why you constantly receive those irritating reminders to schedule a colonoscopy, mammogram, or annual exam. The insurer needs to strike a balance between denying unnecessary services and failing to authorize procedures and tests that will prevent a current condition from becoming very serious and expensive. Those insurers who get this balance right should, in theory at least, be most profitable.
Personally my husband and I are enrolled in an MA plan that we’re very happy with. No procedure requested by our PCP has ever been denied, and the quality of care provided by all specialists has been excellent. Wait times for appointments can be long, but I think this is a reflection of the current shortage of physicians more than anything else, and in case of a serious, acute problem an appointment/procedure has always been scheduled within a couple of days.
Excellent information, Sabine, and I appreciate it. My wife and I both used SHIP advisers in North Carolina to plan for Medicare. It is a fantastic, unbiased service in every state and I always highly recommend going to SHIP for advice for anyone approaching Medicare age.
“I always highly recommend going to SHIP for advice for anyone approaching Medicare age”
Best advice possible, agree 100%
Medicare and Seniors’ Health Insurance Information Program (SHIIP) is available through your state insurance office, or in my county (Buncombe NC) we have a “Council on Aging” with in office SHIIP counselors
And by the way my MA has a much lower yearly out of pocket expense.
I agree this is probably true most years. Until it isn’t. I have a friend who was in a crosswalk, with the walk light, and was run over by an uninsured motorist. Broken hip, broken leg. MA covered the repair surgery but refused to cover a few weeks of in-patient rehab. My friend lived alone. He could not possibly care for himself in a 3rd-floor apartment. That was a wake-up call for him. He withdrew from MA and Medicare covered it and he was able eventually to get a supplemental plan, along with his own insurance, to cover the costs. Extreme case, I admit.
Sorry that is an aweful situation. My policy shows the care in every stage so I would be hard pressed to believe they would not pay. I could be in the hospital for 90 days and only pay for 7. They will even drive me to rehab for something like 100 trips.
To quote myself: “Commenters who say they like Advantage and say they are healthy are not exactly the best ones to take advice from, since they have not yet used the Advantage plan when serious health problems kick in.”
So I guess emphysema and a heart condition is Healthy in your book. Among other issues, really how do you draw that conclusion?
MA is way better than any insurance I have ever had.
Excellent point about a passionate subject. Definitelya love or hate scenario dependingon each person’s experiences.
I’ve a friend on Advantage who had to have back surgery. He had post operative complications and needed to be airlifted to another hospital where he almost died 2x. He’s been 45 days in the hospital as of today.
Today he starts 3 weeks of non-covered in-patient rehab. They are also receiving billings for everything that has occurred and painfully finding things that are not covered. In this particular scenario they are wishing they’d stayed on standard Medicare with a medigap plan. The costs they are seeing far outweigh the premium savings they’ve enjoyed over the years.
As long as you stay healthy Advantage definitely seems the way to go.
If things go sideways it seems not improbable one will get some unpleasant financial surprises. That is a generic statement as I’m sure some advantage plans are better than others.
From day one, I opted for standard Medicare and a Plan G due to our traveling a lot. After ACA, standard Medicare has been a blessing. I had an emergency PCI last year due to 85% LAD blockage, two emergency room visits, lots of tests, appointments, etc. My only cost was the Medicare deductible for the entire year and the low cost generic drugs of about $6 per month required during the first year post surgery. There’s just no way it would have been so inexpensive to my wallet on ACA. No clue if a standard advantage plan would have done as well.
Also, after paying for ACA, standard Medicare seems quite inexpensive. My wife is on her last year of ACA and her premiums are 4x what mine are and she has to jump through so many hoops, pay deductibles, co-pays, etc. She’s looking forward to being on my same plan.
Best of health to everyone!
re: “Also, understanding and dealing with billing is more complicated under Original Medicare, since Medicare, your Medigap plan, and your Part D Plan are all billed separately”
All doctors bills submitted to Medicare are automatically submitted to your supplemental carrier.
I get periodic statements from my Medigap plan, showing how much the doctor originally charged, how much Medicare paid, and how much I will be reponsible for out of pocket (important for me, as I have a High Deductible Plan G)
OM and my Plan D are automatically deducted from my monthly SS, and my supplement is paid automatically monthly by a draft on my bank account.
So having the three separate policies is easy and transparent for me
As with so many things in the private sector, your experience will vary according to whom you choose to do business with. For Medicare Advantage (MA) I chose Humana because it was the highest-rated (by Medicare consumers) in my area. I don’t travel much but they have been accommodating when I needed services and they had no preferred provider within an hour’s drive. Humana is also a “Mutual” insurer, meaning the company is owned by its insureds and any profits are returned to us. Most years, we get a check from them. You can find more info at [https://www.medicare.gov/health-drug-plans/health-plans/your-coverage-options] and plan details for your area, including consumer ratings, at [https://www.medicare.gov/plan-compare/#/?year=2023&lang=en].
My error in the above: Humana is NOT a “Mutual” company; I was thinking of our other insurer, which is Amica. Sorry!
Personal experience with Advantage plans I have none. Extensive contacts with seniors who have them however. Once you require serious care you’ll face triple digit deductibles for one thing. Many times the physicians enrolled in the plans are graduates of obscure medical schools. Whomever in the government decided these companies should be allowed to use ‘ Medicare’ in their advertising should be given a fair trial, and hanged.
The medical system in the U.S. is the best in the world, as long as you don’t need to use it.
All I can speak of is my experience so far with Humana Medicare Advantage. They pay for the majority of my medicare with the advantage plan. I pay $32 a month which comes out of my SS. They pay the rest. All of my medications are covered including things like high blood pressure a Statin and pain medication; these are all free. Primary doctor I see costs nothing but referrals for specialists are $25. If there’s a test that’s in their office it is also $25. I’ve had an EKG in the hospital, $25 how about a nuclear stress test $25. I also receive a card like a credit card valued at $750 per year for dental eyeglass or hearing. Humana also pays a portion of my dental, eyeglass, and also hearing on top of that card. And I also get $40 a month to use towards What they call over the counter items. Aspirin,Cough drops,Blood pressure machine things of that nature they have about 4 to 500 items in their store. To me it’s a no-brainer I have the best health insurance I’ve ever had in my life with the lowest cost I’ve ever had in my life. I guess you could call a setback that you have to go to the doctors on their list well in my town more than half the doctors are on that list and they give me about a 50 Mi radius. Another thing is if I leave the state and go a thousand miles away and I get sick I can go to the hospital and I’m covered 100%. It’s only if you’re not sick and you choose to go to the doctor or the hospital and you’re out of town that you now have to pay for it out of your pocket. No matter where you are you get sick your are covered.
Excellent information, thanks.
So if Medicare advantage denies a claim why would not Medicare B be next in line to provide benefits? My coverage is Medicare advantage gets first crack next Medicare A or B covers what advantage excludes and then my FEP coverage kicks in for what is left unpaid and I pay what is left…. So does Medicare Advantage somehow negate Medicare B coverage ?
I believe that Medicare Advantage takes over administration of Medicare A and B, under rules set by CMS. So in theory the Medicare rules should apply for coverages under Part B. Unless the company wants to try out a denial. The bigger problem could be in getting authorization for seeing a specialist or getting needed followup services.
From what I’ve seen, if you have money, Sups/Gaps are good. But, this is a big but, don’t change in the future because your income changes or the premiums increase with age. Otherwise it’s pointless even starting on it in the 1st place. Might as well save your money with an Advantage plan for that future Max out of pocket.
This is a question that each individual and health needs have to answer.
I’ve seen many times somebody in their 70s-80s switch to a Medicare Advantage because they couldn’t afford the increased premiums. Might as save that money and switched years ago.
It is my understanding that if you don’t start with standard Medicare and a medigap plan in the beginning and go with Advantage it can be extremely difficult to move to standard with a medigap plan in the future. I was told by a state insurance broker to start with standard Medicare and a medigap plan, then switch to Advantage. According to them if you follow that plan you can switch back at any time and not be denied a medigap plan.
I want to say this was concerning pre-existing conditions but I don’t remember for certain.
Another insightful and IMPORTANT article…Thank you.
I’m still many years away from Medicare and I’m NOT looking forward to dealing with the head spinning options and the SCAMS insurance companies devise to fleece our fellow Americans; COLLECT billions in premiums every month and DENY as many claims as possible.
Our healthcare system is fundamentally FLAWD. It is in need of a MAJOR overhaul.
In my humble opinion, the SINGLE payer system is the ONLY solution to this deliberately very complex and confusing nightmare.
A single payer system. A single insurance plan for EVERYONE, inclusive of medical, dental, vision, hearing and other related healthcare services. No deductible or out pocket expenses. ALL doctors, hospitals, healthcare providers and nursing homes across the country are in-network and REQUIRED by LAW to participate.
Everyone younger than 16 years old pays $100/month. The rate goes up as we age: 17 pays $170/month. 18 pays $180/month.
30 pays $300/month. 40 pays $400/month. 55 pays $550/month. 90 pays $900/month. Etc…
Hopefully, in my lifetime.
Stay healthy friends!
In other words, Medicare for all?
Original Medicare plus a high deductible G supplement is great and very affordable
I disagree with your pricing, many 90 year old seniors will not be able to afford $900 a month
Call me a socialist (I’m fine with that) but I believe that premiums should be based on income
Hi David, I’ve done a few videos on the subject as I turned 65 and selected Original Medicare with a Plan N Medigap plan from Mutual of Omaha. One of them is the “Four Disadvantages of Advantage Plans.” The biggest lessons learned is the need to shop your Part D coverage each year, based on the drugs you take. Like Advantage plans, these private insurer plans can rewrite the rules each year. So you must use the plan finder at medicare.gov each fall to pick your best option.
Thanks Jim. I am watching this right now and I will insert your video at the end of my article.
I’m 74 and have never been with the same Part D twice
I find the plan finder of Medicare.gov very easy to use, and very precise (then again, I’m very computer savvy – and regularly help less computer savvy seniors find the best plan for them)
This year I have a Part D plan that costs $12.70 a month and covers my 3 generics for free
David,
Any thoughts on the pros and cons of original Medicare plan G vs plan N? Thank you.
As I recall, these are very similar but Plan N has a slightly lower cost. Plan G covers Medicare Part B excess charges, while Plan N doesn’t. That “could” be an issue, but apparently this excess charge problem is rarely seen. And I think Plan N has some small copays for doctor visits.
Appreciate your information.
David,
You nailed it, right down to this:
“***Plan N pays 100% of the costs of Part B services, except for copayments for some office visits and some emergency room visits.”
Chart from Medicare.gov listing each possible type of benefit and whether specific Medicare Supplement Plans do or do not provide that benefit:
https://www.medicare.gov/health-drug-plans/medigap/basics/compare-plan-benefits
the $200+ premium that I used to send United for my Plan G now goes towards my monthly I-bond purchases.
Smart! 😉
How about the drug program money too?
my plan covers it all for $31/month. it’s only offered locally in my area.