Top 5 Things your Medicare Advantage salesman won't tell you

[Z3Dreamer]

‘The Cash Monster Was Insatiable’: How Insurers Exploited Medicare for Billions
By next year, half of Medicare beneficiaries will have a private Medicare Advantage plan. Most large insurers in the program have been accused in court of fraud. https://www.nytimes.com/2022/10/08/upshot/medicare-advantage-fraud-allegations.html

Sorry but it is behind a paywall. It is suspect because they use the terms "Most" and "Accused". Something like: MA plan xyz ordered to pay $x billion to CMS because of fraud would be better.

Even if some plans get accused of overbilling, do you want to get into a discussion of the medigap side of this which is medical professionals overbilling Medicare?

 

[Z3Dreamer]

It's not just denying things like physical therapy where you could pay OOP.

But when you develop a form of cancer whose treatments require $60,000 infusions every four weeks (according to your oncologist) but your MA plan will only approve paying for those infusions every eight weeks what will you do then?

It would take weeks for any appeals...the first two levels of which are internal anyway, IIRC.

No one would want to be in that situation. If you feel that it is a real possibility and it bothers you greatly, MA's are not for you. The MA denials that I am aware of have been reasonable. YMMV.

 

[Z3Dreamer]

from the original link:

If you choose Medicare Advantage, the Centers for Medicare & Medicaid Services (CMS), transfers that average $13,500/year benefit to the private health insurer you select. In turn, the insurer is allowed to skim off up to 15% of that $13,500 in admin expenses (i.e., $2,025/yr) though in many urban areas competition may limit that skim rate to 12% or so. That 15% figure relates to the so-called Medical Loss Ratio or MLR. Medicare demands that Medicare Advantage insurers spend at least 85% of your benefit on actual medical services and no more than 15% on overhead & profit.

For 2021, traditional Medicare had program costs of $887.6 Billion, spent $839.3 Billion on actual medical services for its 63.8 million beneficiaries, and $10.8 Billion for administrative expenses. (See Page 12, 2022 Medicare Trustees Report). That's an admin cost of 1.2%.

There are many reasons why a for-profit insurance company would have higher admin costs than a government agency, but I don't understand the relevance of this discussion as those are "input" numbers. Shouldn't the evaluation of the plan be based on outcomes? Such things as health of patients or cost to customers.

 

[Z3Dreamer]

OP had a well thought out article by someone he had a lot of respect for. The article happened to agree with his knowledge about MA plans. I am on the opposite end and I had time to kill, so I decided to present the other side, in great detail. I may be wrong, but my points are well researched. As I said in my first post, I doubted that I could convince anyone of my side. But I think that if I post anymore to this thread: I will will be banned. Sent for OCD treatment. Drawn and quartered.

I am stepping out gracefully, not conceding. Please continue to bash MA plans without me responding.

 

[Irishgirlyc58]

from the original link:

If you choose Medicare Advantage, the Centers for Medicare & Medicaid Services (CMS), transfers that average $13,500/year benefit to the private health insurer you select. In turn, the insurer is allowed to skim off up to 15% of that $13,500 in admin expenses (i.e., $2,025/yr) though in many urban areas competition may limit that skim rate to 12% or so. That 15% figure relates to the so-called Medical Loss Ratio or MLR. Medicare demands that Medicare Advantage insurers spend at least 85% of your benefit on actual medical services and no more than 15% on overhead & profit.

For 2021, traditional Medicare had program costs of $887.6 Billion, spent $839.3 Billion on actual medical services for its 63.8 million beneficiaries, and $10.8 Billion for administrative expenses. (See Page 12, 2022 Medicare Trustees Report). That's an admin cost of 1.2%.

But right above the chart it states:

For fee-for-service Medicare, the largest category of Part A expenditures is inpatient hospital services, while the largest Part B expenditure category is physician services. Payments to private health plans for providing Part A and Part B services represented roughly 48 percent of total A and B benefit outlays in 2021.

I believe the numbers you quoted include all expenses for part A and B.
Do you read that differently?

 

[Irishgirlyc58]

Regarding the 15% admin costs that MA plans are allowed in order to compare how do Medigap plans make their money for admin costs? They are private insurance as well. It costs them to process claims, they have overhead. Where is the accounting for their admin costs?

 

[Gotadimple]

Regarding the 15% admin costs that MA plans are allowed in order to compare how do Medigap plans make their money for admin costs? They are private insurance as well. It costs them to process claims, they have overhead. Where is the accounting for their admin costs?

It's probably built into the premium rate that CMS approved for the plan. Along with the commission costs the plan must pay sales people.

 

[Irishgirlyc58]

It's probably built into the premium rate that CMS approved for the plan. Along with the commission costs the plan must pay sales people.

I assumed this as well but where is the accounting for that amount?
If we know what MA can use for admin costs for all 4 programs- Part A, B, D, and the gap coverage shouldn’t we be able to determine the % insurance companies that provide only the gap coverage charge for admin costs?

I ask because if I were truly analyzing/ comparing these programs I would want to know this.

 

[Texas Proud]

So where does "Boomer Benefits" fall in the "you can trust what they say" scale? I'm not on Medicare, but probably plan to contact them or someone like them when I do go on Medicare.

I have not used Boomer Benefits but did go to a local agent's seminar and separately, one on one meetings with an agent whom I knew personally. I did my homework though and ultimately went with the AARP supplement which was not the one promoted by my agent friend. I did have him do the paperwork though!

One thing is who you get on the phone... I got someone who seemed that they did not want to talk to me... they recommended a new firm that I wanted to research some before buying... so asked about a plan D... was told they would talk about plan D when I signed up for a plan !!!



I called Senior Savings Network and had someone that was very helpful. Talked about the plans and even a D plan. They were also recommending the same firm BB recommended so wanted to do research. Later I found that UHC was not included by them in the rates given. When given their rate was higher than what UHC was gong to charge but they do not even write UHC plans.


No matter who you call you are dealing with agents that have their opinion and incentives and it might not be the best for you. Like always you need to do your own homework and make an informed decision.


BTW, the guy at BB was not working there a month after I had talked to him as someone else called me to pick up his contacts. Who knows how they would have been if they were my first contact. I would have gone with SSN if the rate for UHC was the same as what I got and they wrote it. They were very helpful and informative.

 

[CRLLS]

.....No matter who you call you are dealing with agents that have their opinion and incentives and it might not be the best for you. Like always you need to do your own homework and make an informed decision.....

^ +100

 

[Texas Proud]

OK, you ask for Medigap disadvantages. The whole Medigap theory is a reactive approach. My MA is a proactive approach. My MA has preventative things. So this is a big disadvantage of Medigap. I can give a whole bunch of examples of how they try to get/keep you healthy, if you want.

A second advantage of my MA is the speed at which they process claims. My MA is within a few days. DW's Medigap is lengthy. A recent misbilling took her two months to clear up.

I have more but I will address the "However if you get sick, that disadvantage can disappear very quick." Yes, my MA has co-pays, but no deductibles and no premiums. In some years, you will do better with an MA and some years you will do better with a Medigap. This is the whole concept of risk management. Do want to pay nice regular premiums or only pay when you are sick? Personal choice. Let me ask you this: For your house, would rather pay low premiums but have a higher deductible or pay high premiums and have a low deductible? Again, personal choice. But I hear from people are passionate that a high deductible on a house is bad, stupid, etc.

On my MA plan, if I save $2,000 per year for a number of years, but have a number of years where I pay more, is that bad?

I don't understand this point: "Another point, clearly the dollars allocated to Advantage plans is to high." I think you are saying that it costs the government too much and is therefore bankrupting Medicare. Is that correct?

Your last point is: "The are spending on advertising with thousands of commercials to coerce you into a plan. If it wasn't overly profitable they wouldn't spend so much pushing it." I think you are saying that the massive amount of spending on advertising proves it is too profitable and therefore their product must be bad. I don't see that one follows the other. I could argue that all advertisers must be bad by that logic, but you would say that I was offering a strawman's argument. I could say that they have to advertise to overcome all the negative things about MA, but you would say they are doing a bad job as we are all sick of Joe Namath and JJ Walker. I will just agree that we are all sick of the MA advertisements.

Your first point is a strawman... having a gap plan does not prevent your Dr from being proactive with your healthcare...



Your second is also a strawman... who cares how long they take to process claims... if you do not have to pay anything then it is a non-event IMO... why would you have to spend time to fix a problem? A simple call saying I have plan G or N is all it should take (this was told to me by someone on an F plan who said he rarely gets a bill)


You might have a great MA plan that might not be offered to everybody... I have two sisters who are on MA plans that are through the state for retirees... they do not save that much money as they do have to pay a premium.... they also do not have to get approval for most things.... but I cannot get this plan.

 

[Scuba]

Pre-existing conditions are not considered when initially signing up for traditional Medicare. They are considered only by the supplement carrier if you're switching from Medicare Advantage. I retired at 61 and DH was 75. He had cardiac stents and polycythemia (bone marrow churning out too many red blood cells- eventually morphed into acute myeloid leukemia, which is a common result). No problem at all getting him traditional Medicare coverage and no major out-of-pocket expenses, even through his final months.

This is a relief! Thank you.

 

[Gotadimple]

No matter who you call you are dealing with agents that have their opinion and incentives and it might not be the best for you. Like always you need to do your own homework and make an informed decision.

There is an exception to this statement. There is also your state's insurance commissioner who has an independent department called SHIP (In Washington state it's SHIBA). These are volunteers who are not agents who will talk with you about your needs and make a recommendation based on your circumstances. Unlike agents they maintain a database of all Medicare plans. From the Medicare Handbook:
"SHIPs are state programs that get money from the federal government to give local health insurance counseling to people with Medicare at no cost to you. SHIPs aren’t connected to any insurance company or health plan. . ."

 

[SecondAttempt]

So let me ask another loaded question...

Do Medicare Advantage plans give you access to better doctors? I know doctors have no obligation to accept medicare patients at lower fees than they normally charge, nor do I think they should.

I'm not someone who thinks a doctor's reputation or skill necessarily leads to a better outcome in most cases but I have to ask the question. Do I get better care with MA vs. medigap?

 

[Scuba]

So let me ask another loaded question...

Do Medicare Advantage plans give you access to better doctors? I know doctors have no obligation to accept medicare patients at lower fees than they normally charge, nor do I think they should.

I'm not someone who thinks a doctor's reputation or skill necessarily leads to a better outcome in most cases but I have to ask the question. Do I get better care with MA vs. medigap?

I can’t speak for doctors but I know when I worked in the senior living industry, we preferred traditional Medicare to Medicare Advantage, which typically negotiated lower rates. Our more premium SNF’s would not accept quite a few of the bargain insurance plans.

 

[ls99]

Was musing about switching to plan G from plan F, which I have via USAA. Poking about their web site, turns out the no longer offer Medicare supplement plans in my PA zip code. Only Medicare Advantage plans. None of which interests me. The Plan F costs have been inching up every year as Age adjustments. Am spending my nieces' inheritance on the the plan.
So I'll stick with what seems like a grandfathered plan, F.

 

[ShokWaveRider]

Do Medicare Advantage plans give you access to better doctors? I know doctors have no obligation to accept Medicare patients at lower fees than they normally charge, nor do I think they should

Not that we have noticed. But I will say there are 10x more docs here that take Medicare + supplement that take the local MA Plans.

DW is still on ACA (Same plans as MA here, but with a little better networks) and she is always searching for docs that take her plan. I have not found any that don't take my Medicare or that overcharge. In 2024 she will be eligible for Medicare + Supplement (No less than G for us) and we will open a VERY good bottle when that time finally arrives. We are Medicare Fans as you can tell. I have a new Pacemaker to prove it and have never paid a copay or any OOP in the last 4 years since being on Medicare. There service has always been Stella and the Mayo Clinic and Baptist health are providers.

 

[REWahoo]

Do Medicare Advantage plans give you access to better doctors?

No.

Since most Medicare Advantage plans are HMO, they likely give you access to fewer doctors than Medicare. Large specialty practices also may not accept MA insurance, such as MD Anderson or the Mayo Clinic.

This potential limitation is one of the main reasons we stick with Medicare + Medigap. No way I want to be trying to navigate who/where I can seek medical treatment, especially for a serious illness.

 

[athena53]

But I will say there are 10x more docs here that take Medicare + supplement that take the local MA Plans.

I found one weird exception in my area. A chain called Partners in Primary Care advertised heavily- aimed at seniors only. I thought that was a great idea but when I called them they took ONLY Medicare Advantage.

That was enough to turn me off.

 

[mf15]

I just went the medicare site and searched medigap plans in my zip. I have been on medigap F-HD 63/month for 9 years now and just wanted to look. I am astonished at the number of insurance companies I never heard of offering medigap plans.
Oldmike

 

[ncbill]

No.

Since most Medicare Advantage plans are PPO, they likely give you access to fewer doctors than Medicare. Large specialty practices also may not accept MA insurance, such as MD Anderson or the Mayo Clinic.

This potential limitation is one of the main reasons we stick with Medicare + Medigap. No way I want to be trying to navigate who/where I can seek medical treatment, especially for a serious illness.

Aren't most MA plans HMO?

HMOs limit which doctors are in-network.

 

[REWahoo]

I am astonished at the number of insurance companies I never heard of offering medigap plans.
Oldmike

Medigap is a relatively simple product for an insurance company. No need to factor in what to cover or exclude or to hire a staff to determine whether or not a claim is valid. If Medicare pays, you pay.

The difficult part is determining risk and pricing premiums.

 

[VanWinkle]

The venerable John Greaney, who as far as I know was the first person to have a website devoted to the then-new notion of FIRE, only posts a couple of times a year now but when he does it tends to be memorable.

Here's his update on the financial realities of Medicare Advantage, just in time for open enrollment (which starts today):

https://retireearlyhomepage.com/medicare2022.html

It sure would be nice if the realities he discusses here about financial incentives for these insurance agents and what AARP is actually about were as widely viewed as glossy ads for Advantage plans.

It appears to me that the article would support using just Medicare with a part D supplement instead of paying Medigap 1200-3600 per year to cover the 1200 bill for the 700,000 medical occurrence in the article.

 

[ShokWaveRider]

Aren't most MA plans HMO?

HMOs limit which doctors are in-network.

There are both. The HMO ones are usually the cheapest with very limited networks, depending on your location. Here they are terrible, and most are $0 cost before copays and MOOP.

PPO plans are like the ACA plans I used to have and that my DW still has, still with limited networks but nowhere near as bad as a MA HMO. Clark Howard calls MA HMOs Dis-Advantage plans.

However, they are a good option for those who require cheap Healthcare or who cannot afford real Medicare.

Now this does NOT apply to well-run HMOs such as Kaiser in California and others in Massachusetts and Hawaii that have good healthcare systems.

Where we are HMO MA plans are not good at all. PPOs are a lot better but not cheap, especially when one adds in the Copays and MOOP. For me it would have been a lot more than my Medicare + Supplement plan.

Ask my friend who needed a liver transplant due to cancer. His surgery alone cost over $750k. He luckily has an ACA PPO plan with the Mayo Clinic, and it costs $700 a month + $7k MOOP. Try getting that on your HMO, or even perhaps your PPO. I think Good ACA Plans are similar to higher cost MA PPO plans. But not all MA plans are created equal.

So as in Real Estate it is location, location, location. JMHO I could be wrong.

 

[REWahoo]

Aren't most MA plans HMO?

HMOs limit which doctors are in-network.

Right, that's what I meant to say. Corrected my post.