by Cheryl Clark, Contributing Writer, MedPage Today
December 03, 2019
Like many of the 22 million seniors now enrolled in Medicare Advantage (MA) plans, Tom Mills belatedly discovered its dirty little secret.

Also called Part C, these plans can cover a broad array of health services at low cost -- that is, until one gets sick, at which point out-of-pocket costs can soar. But once in an MA plan, getting out can be even less affordable.

After Mills underwent a mitral valve repair and suffered a mild stroke with no lasting effects, the San Diego resident's plan now charges him hundreds of dollars in monthly copays for drugs and other medical services. He had to pay $295 a night for his hospital stay.

But there was a much bigger shock. Mills, 71, learned that switching out of his MA plan will incur exorbitantly higher costs the next time he needs a serious medical intervention. If he moves to traditional Medicare and a prescription plan, he still needs a supplemental Medigap plan to pick up his 20% copays and deductibles.

Though the retired environmental geologist is training for his 57th half marathon, he now has a pre-existing condition. Medigap plans in all but four states can and do reject people like him or require prohibitively higher premiums. Diabetes, heart disease, or even a knee replacement can be criteria for exclusion.

A health insurance broker told him no supplemental plan would cover him, and he'd be wasting his time if he applied.

No one told him about this side of MA when he enrolled at age 65. "You hear the pros, but nobody lists the cons."

In the run-up to the Dec. 7 deadline to sign up for Medicare coverage, broadcast ads like one with Joe Namath tout Medicare Advantage's array of services: dental, vision, hearing, gym membership, rides to medical appointments, doctor and nurse visits by phone, and even meal delivery and home aid. "Get what you deserve ... at no additional cost," Namath says. "Call now -- it's free."

But some advocacy groups, including the American Medical Association (AMA), are pushing to mandate tighter plan rules and disclosure, with lists of network specialists. The AMA recently approved a resolution calling on the Centers for Medicare & Medicaid Services and other stakeholders, including the senior citizens' lobby AARP, to make the process of choosing Medicare plans less confusing and more transparent.

A similar AMA resolution in 2018 declared that "seniors are lured to these advantage plans by misinformation and confusing sales techniques," and that plan inadequacies result in "delay in nursing home placement for some members," produce "poor service for some members ... due to difficulties with physical therapy and rehab services. The number of days approved (for payment) has tended to be too short and the extent of rehab services too limited."

Kevin Burke, MD, and Deepak Azad, MD, primary care doctors in Indiana, are members of the delegation that sponsored both resolutions.

"If your health is good, maybe these plans represent value for some patients, like providing gym memberships," Burke said. "But that can change in the blink of an eye ... with a stroke or an accident or some acute medical condition and they need a rehabilitation stay." Then, services are restricted so much that "they can't recover adequately from the stroke, or they bankrupt themselves staying another month to get a good recovery."

Then they're eligible for Medicaid, which pays doctors much less.

Bonnie Burns, training and policy specialist consultant for California Health Advocates, said, "The thing that docs should focus on is that people are spending down the resources they have as a result of healthcare costs, and so people who are in an MA plan where they're paying out of pocket for various costs, they're spending down but in the process of spending down, that means more and more people showing up on the Medicaid rolls in that age group. Lots of doctors don't take Medicaid for obvious reasons."

Burke and Azad think Medicare should not let people with serious health risks buy MA plans in the first place. And some critics say MA across the board is basically a scam.

'Confusing' Tools

Medicare.gov websites aren't always clear about the process of transferring out of MA to traditional Medicare with a Medigap plan, but the general bottom line is that getting accepted by a Medigap plan is guaranteed only within the first 12 months after enrolling in Medicare at age 65.

MA plans, which are managed by private insurers, can be very complex, with the potential for substantial out-of-pocket costs when beneficiaries get sick played down. Medigap policies, which pay for many expenses not covered in basic Medicare, may cost more in monthly premiums up front, but once one is enrolled, premiums are set solely through "community rating" and beneficiaries' age. New-onset health issues do not lead to premium increases.

The catch is that if one initially enrolls in an MA plan and then decides to switch out more than a year later, Medigap insurers will take into account the individual's pre-existing conditions, and may decline coverage or demand high premiums.

The newly revised Medicare Plan Finder tool does not explain this possibility. Nor does another CMS website, "Join, switch, or drop a Medicare Advantage plan."

A third Medicare.gov website, "When can I buy Medigap?" is more specific, explaining in the third section that "there's no guarantee that an insurance company will sell you a Medigap policy if you don't meet the medical underwriting requirements," meaning the Medigap issuer's stance on pre-existing conditions.

Yet another Medicare publication does explain that if beneficiaries enroll in a Medicare Advantage plan at age 65 and want to get out, they must do so within 1 year, and then they have another 63 days from the disenrollment date to buy a Medigap plan without risk of coverage denial or being subject to underwriting.

But many of these documents are full of terms unfamiliar to ordinary laypeople, Burns pointed out. "Networks and copayments and formularies and uncovered costs and appeals and who knows about that stuff? That doesn't happen until you get sick. No one understands their insurance coverage until they have to use it."

Other Complaints

Besides MA's lack of transparency on costs, critics also cite problems with insurers' provider networks. The AMA wants CMS to make sure networks are adequate and list physicians, their specialties and subspecialties, and how many actually cared for plan members the prior year.

AMA spokesman Robert Mills (no relation to Tom Mills) referenced a Kaiser Family Foundation report that found 35% of plans studied were served by a "narrow" physician network, meaning that fewer than 30% of the physicians in that county were contracted.

"Plans may purposefully understaff specialties to avoid attracting enrollees with expensive pre-existing conditions like cancer and mental illness," he said.

David Lipschutz, an attorney with the Center for Medicare Advocacy in Washington, D.C., also hears about limitations. "It's a common scenario," he said. "Often you have to jump through certain hoops or over certain barriers to access care, or it's subject to prior authorization."

His colleague, attorney Toby Edelman, has heard beneficiaries complain about plans that have two nursing homes in their network. "There are 50 in your area, but they have two and these are not the best."

At California's Health Insurance Counseling and Advocacy Program, San Diego manager David Weil hears horror stories too. "If they answer yes [on a questionnaire] to something the company doesn't like, the company won't sell them a policy. Almost anything can be on their list."

Why do people want to switch? Weil described it as a "funnel effect, the feeling that you have to squeeze through an ever-closing hole in order to get services ... Or you have to wait eight weeks to see a specialist. People get fed up with that."

Last month, veteran consumer advocate Ralph Nader blasted MA plans as nothing more than a way to enrich health insurers at seniors' expense. Calling the plans "Medicare Disadvantage" and a "corporate trap," Nader took the AARP, which offers its brand of Medicare Advantage through UnitedHealthcare, to task for being asleep on the issue, and in conflict because it gets a 4.95% commission.

AARP spokesman Gregory Phillips responded: "AARP supports increasing access through guaranteed issue to Medigap coverage, in addition to eliminating medical underwriting and age rating, to ensure that older Americans will get the coverage they need when they need it most."

And he agreed that many beneficiaries may not be aware that plans "may terminate their relationship with Medicare in any given year; change the premiums, cost-sharing charges, or benefits from year to year (including drug coverage); and drop physicians from their networks during the year."

"Beneficiaries may also not be aware that if they want to voluntarily leave an MA plan and return to traditional fee-for-service Medicare, they may be subject to medical underwriting for a Medicare supplement (Medigap) policy. This underwriting may result in their being refused a policy or being required to pay higher rates."

But Phillips defended AARP's participation in MA, saying it provides information on both MA and traditional Medicare plans.

This is important information, somehow it is seldom mentioned in the ads. This little tidbit was given to the insurance companies as an incentive.

I am just starting to research the whole Medicare mess since I'll need to sign up for it in the next three years. What a confusing mess. It is maddening. Thanks for the post... until I read this MA seemed like a no brainer.

Since I switched from the traditional Medicare plan before retirement age on SSDI, it was clear that I had a pre-existing condition (stroke) but the MA plan took over my Medicare plan $$ at no additional costs. Late last year I had a heart attack and though it's now been almost a year out, my only out-of-pocket expense was $112 for the emergency transport services. I was inpatient for 3 days and required stent work and valve job in the Cath Lab.

Even since, there's been no changes in my MA prescription plan and PCP. I'm still paying -0- co-pays for 4 meds a month with the exception of $1.25mo for the low dose aspirin.

I'll admit though, I've always wondered about the other proverbial shoe dropping with these MA plans and costs sky rocketing, both services and prescription plans. Or, services shrinking such as specialists or even my current PCP being dropped from their plan...then what, like you mentioned, higher costs to get into another plan. A shame really as my PCP is a great guy and family friend.

Before we reached Medicare age, we attended a free seminar put on locally by Medicare Simplified (medicaresimplified.org) where they went over the pros and cons of standard Medicare vs. Medicare Advantage plans. That was some years ago and they advised against MA plans at that time. The only thing they sell are their consulting services to help guide you through the morass of information you're running into. We signed up for their help and it made the process much easier to understand and get through. It was a couple hundred, if I remember right, and they provide consultation and individual support from the time you sign up until you (and your spouse, if applicable) are enrolled in whatever plan you decide on, however long that takes. That also included help with Medigap plans and Part D, if you go with standard Medicare.

Might want to consider something like that. I'm sure they're not the only company doing that sort of consulting; they just happened to be the one we used.

My wife has been taking care of our finances ever since soon after we got married. Quite frankly: She's better at it than I was. (Being more responsible with spending, for starters.)

She spent dozens upon dozens of hours researching MA vs. MediGap and the various plans offered by the dizzying array of providers. Worked with a Medicare consultant and consulted with another. Bottom line, she told me at the time: MediGap is more expensive, but offers way better coverage. This is a woman that chooses "more expensive" only if there's a really good reason. So when she said that was the way to go, that's the way we went. She also opted for Medigap Plan G, which covers us for everything except a $185 deductible.

What many people fail to consider when choosing these plans is it's nearly inevitable that, as you grow older, the amount and cost of your medical care is going to increase--probably substantially. Her thinking, and I agree, is better an affordable regular expense than taking the chance of our retirement savings being drained in case something very serious occurs.

Joe Namath and his "It's FREE!" advert will ring loud alarm bells for anybody with any common sense at all. Nothing is free. Somewhere, somehow or another, everything has an associated cost.

IMO, people who fall for "It's FREE!" adverts on TV exhibit about as much sense as people who fall for Nigerian scam spams telling them a long-lost relative died and left them a fortune--all they have to do is send the scammer some money to get it unlocked.

I call health plan one every other year to find if there are better insurances offered for me.
877-581-5373.
So far they seem to be on top of the business of the ins and outs.

When my wife enrolled in medicare we went to a free presentation by a local advocate group and were told all this up front, for nothing.

She has declined MA and is going with a Medigap plan for the reasons noted. If you don't sign up in the first 6 months of eligibility, when they HAVE to accept you, no questions asked; you run the risk of refusal, or extremely high premiums if you try and do so after a health event.

This message has been edited. Last edited by: Pyker,

I will be eligible in April and am going with G also.I have no major health issues but paying a little more upfront is a no brainer for me.

Is there some sort of expert adviser who can help one waddle through the confusion? Like a retirement financial adviser or something? Someone who would have a fiduciary duty to you rather than to the plans like a broker?

quote:

Originally posted by konata88:
Is there some sort of expert adviser who can help one waddle through the confusion? Like a retirement financial adviser or something? Someone who would have a fiduciary duty to you rather than to the plans like a broker?

Health plan one 877-581-5373 seems to be for the person not the ins co.
But not a retirement advisor.

quote:

Originally posted by konata88:
Is there some sort of expert adviser who can help one waddle through the confusion?

There are, but you're going to have to do your homework to find the one that'll work for you.

As you're discovering: This is all way more complicated than it should be. Sorry to say, but there will be no substitute for you learning the ins and outs, pros and cons, of the available options.

Even with a reputable consultant who really is looking out for you, you'll be best served by understanding things so you understand their recommendations.

I retired from state Civil service in Pennsylvania, some 16 years ago. My pension plan takes care of Aetna for part B and Medicare. I have a reasonable co-pay and small deductible cost, plus a modest prescription charge.

Each year around this time I'm deluged with phone calls to change over to this plan or that plan.

Just this morning I received three sales phone calls beginning at 7am.

I just wish they would leave me alone.

People need to understand, there is no free lunch.
Most people seem to go for the Advantage plans because they often cost little or nothing in premiums and claim to offer some services like vision and dental that Medicare does not offer. The devils in the details. Read those policies very carefully and talk to the doctors you would like to use first.
I want Medicare or any other insurance to protect me from expenses that would bankrupt me. I've been on Medicare for about 1 1/2 years now and chose traditional Parts A&B and a Plan G that covers the gaps with a deductible of $189 for the year plus a Part D (drug) plan. The combined premiums for those 3 is just under $300 a month. I was paying around a thousand a month and $5500 deductible before being old enough to sign up for Medicare.
Compared to paying the market rate for regular plans as a self employed person that I had to pay before 65, this is really good insurance with a low premium and deductible.

At 62, I'll be diving into this quagmire soon enough. I'm self employed but current insurance is through my wife's local government job, which has saved my ass through 2 hip replacements and heart troubles I incurred a couple years ago.

Keep the replies coming from those in the know, because I want to be informed as best I can for the coming change.

I haven't reviewed options since I first bought a supplemental policy 6 yrs ago. Took a look this year at an advantage plan. I think the AARP Advantage plan in my area is pretty good, but the "unknowns" still scare me.

I did discover that some companies write some supplemental (medigap) plans with a "high deductible" option. Same coverage as my expensive Plan F, but I can save about $4000 in annual premium for my wife and I combined, in return for a $2340 deductible per person. So if we both maxed out our deductibles in the same year, we would be losing a little, but the chances of that are probably low, since we are both in good health so far. But in a normal year we could save a lot, and still have top notch coverage. Anybody using one of these?

My wife's MG policy has a 2300$ deductible. That's one good ER visit and a few labs worth. After that its 100% paid. What's not to like?

Stay with Medicare and a Gap policy for part B. But the supplement will go up every year. First year at 65 I paid $98.00 and at 72 now it’s $190.00. My wife’s runs about $20.00 a month cheaper. Keep in mind unless you have absolutely no health issues you will have a hard time going with another supplement company. I have tried two different companies that quoted cheaper prices for the same coverage but they turned me and my wife down.

I think this thread is excellent for telling people to be cautious. Thank you all for contributing.

Very timely for me. Thanks for posting I have some friends at work that will find this helpful as well.

I immediately change the channel when I see the add with this hack hawking for it.

quote:

broadcast ads like one with Joe Namath tout Medicare Advantage's array of services: dental, vision, hearing, gym membership, rides to medical appointments, doctor and nurse visits by phone, and even meal delivery and home aid. "Get what you deserve ... at no additional cost," Namath says. "Call now -- it's free."