AARP article on the future of Traditional Medicare

[CRLLS]

Interesting article by AARP here:

https://www.aarp.org/health/medicar...inal-medicare-survive-medicare-advantage.html

A couple of things I read were :

In 2023, more than half of Medicare’s 60 million beneficiaries who have both Medicare parts A and B are enrolled in an MA plan.

Ever since its inception in 1997, MA and its plans have been paid more to take care of Medicare beneficiaries than original Medicare pays. Early on, the idea was to give insurers a profit incentive to create and sustain MA plans. Now many experts say it’s time to stop those extra payments, something health insurers have strongly opposed.

Although the article was about how the 2 systems compare and the differences between them, the focus was more about how traditional MC may need some changes to compete with Advantage plans.

I thought the article was fairly balanced between traditional plans and Advantage plans.

 

[rk911]

We are in traditional Medicare, a Plan F supplement and a Part D plan. We looked at Part C plans and rejected them. We prefer being able to see any doctor that accepts Medicare without needing a referral.

 

[Chuckanut]

Before I retired, a friend who was about 15 years older than me gave me this advice, “Buy the best medical insurance you can afford.” I am finding he was right.

 

[RetireBy90]

I read the article the old fashioned way, the paper copy delivered yesterday
I wasn't sure what the bottom line was, seems they (AARP) want to make changes to traditional medicare because the Medicare Advantage was serving more people and growing faster. Seems if MA is the choice of more and more let it carry the load. It wasn't clear what the difference in cost to CMS is.

We have MA with Kaiser. Love it and to be honest we don't really compare other plans.

 

[CRLLS]

It wasn't clear what the difference in cost to CMS is.

According to https://www.kff.org/medicare/press-...osted-medicare-spending-by-7-billion-in-2019/ in 2019 there were 22million in advantage plans and MC paid the Advantage providers $326 more per annum than they spent for traditional MC. My calculator says that was over $7 billion extra. Another article said that today's number of participants is 30.8 million.

I am not saying that traditional MC is better. I just see no need to encourage MA providers to get into that business anymore. Meanwhile, Medicare reserves are dwindling.

 

[CRLLS]

A follow-up. I wonder if the growth of Advantage plan participants grow disproportionally, That the same effect of closing book on medigap plans will occur. That is the average age of a Plan G participant will continue to grow, making the cost of that group grow faster than inflation. Do you think this will likely occur?

 

[teej1985]

A follow-up. I wonder if the growth of Advantage plan participants grow disproportionally, That the same effect of closing book on medigap plans will occur. That is the average age of a Plan G participant will continue to grow, making the cost of that group grow faster than inflation. Do you think this will likely occur?

Medicare Advantage has annual open enrollment so should be a non-issue if you live in a populated area with lots of options and big networks.

 

[PatrickA5]

I read the article. Pretty informative.

I wonder how many MA plans are sold as a result of all of the TV commercials. I mean Joe Namath tells me I can get dental, vision, groceries and even have money added to my Social Security check. What's not to like?

I personally have regular Medicare with a UHC/AARP G supplement.

 

[rk911]

We're very happy with traditional MC and our Plan F supplement. If those go away I'm not sure what we'll do. Assuming that the American economy doesn't implode we may just stay with traditional MC and go out-of-pocket for the difference if the supplements go away. BTD!

 

[VanWinkle]

We are in traditional Medicare, a Plan F supplement and a Part D plan. We looked at Part C plans and rejected them. We prefer being able to see any doctor that accepts Medicare without needing a referral.

I believe PPO part C plans solve that problem. HMO plans require referrals.

VW

 

[VanWinkle]

Before I retired, a friend who was about 15 years older than me gave me this advice, “Buy the best medical insurance you can afford.” I am finding he was right.

He didn't happen to be an insurance agent.......

 

[Midpack]

We are in traditional Medicare, a Plan F supplement and a Part D plan. We looked at Part C plans and rejected them. We prefer being able to see any doctor that accepts Medicare without needing a referral.

That was determining factor in our decision to go with original Medicare and our own Plan G and Part D plans. We never considered MA. Interesting linked article though.

 

[CRLLS]

Getting back to my follow-up question. Do you think if the rapid growth of Advantage plans over traditional MC continues, it will effectively create a closed book situation for those on traditional MC?

If the current trend continues, I see it as a softer version of closing Plan F a few years ago. Only the older participants will be in traditional MC, causing the rates to increase much faster than the other option (Advantage plans).

 

[Fermion]

Do I need to be thinking about this stuff yet at 53, 54 or can I wait a few years to worry? When did you all decide what to do?

 

[zl55lz]

Getting back to my follow-up question. Do you think if the rapid growth of Advantage plans over traditional MC continues, it will effectively create a closed book situation for those on traditional MC?

If the current trend continues, I see it as a softer version of closing Plan F a few years ago. Only the older participants will be in traditional MC, causing the rates to increase much faster than the other option (Advantage plans).

There would seem to be several avenues to take before getting to that point, such as raising premiums, higher Medicare deductions from paychecks, covering a lower percentage of the bill, or other such things. Whether other options such as Medigap and Medicare Advantage would then adjust to fill in the gaps is another matter. I think most everyone knows the system has to change somehow, but how that is remains to be seen. My opinion is it will be slight changes over decades?

 

[Alex The Great]

I'm not on Medicare yet but I believe I won't have a choice other than signing up for Advantage since a major network I currently use require it:
https://coverage-ca.com/2021/09/02/...-some-patients-enrolled-in-original-medicare/
They also do not accept any Medigap plans.

 

[CRLLS]

I think you can wait. Retiree healthcare choices will certainly change over the next 11 years. It is not something that will change your current plans, like managing income for ACA or RMDs will.

So far, traditional MC vs Advantage is a "plan nothing until it is time" decision. Keeping up with the choices as they change is good though.

 

[rk911]

Do I need to be thinking about this stuff yet at 53, 54 or can I wait a few years to worry? When did you all decide what to do?

We started looking at options a few months before we were eligible to sign up. It didn't take long to decide on traditional MC, a Plan F supplement and a Part D plan. We like being in charge and not needing referalls. Seeing all the MA commercials...the yelling, screaming, 'Martha', the too-good-to-be-true-promises of free this, free that, money in your check...all make us more secure in our choice.

 

[Katsmeow]

I have traditional Medicare. I think the appeal of Medicare Advantage is really threefold.

First, there is all the advertising and pushing of people to get Medicare Advantage. I am getting mail almost everyday pushing Medicare Advantage. In my old location, my doctor pushed it. Ads on TV. I saw one the other day that was just so disgusting. It had an announcer trying to convince this addled, childlike old woman to call to get all these benefits of MA. It was so demeaning to the supposed buyer. They yelled at her like she was a small child and she was was wide eyed and confused. Ugh! And, of course, it was giving all the advantages of none of the disadvantages of MA. And, of course, you don't ever see adds for traditional Medicare. There are no insurance companies advertising on TV for it. So, many (most) average people probably internalize this idea of Medicare Advantage is so much better.

Second, there are a lot of people who simply can't afford the premiums on traditional Medicare and a supplement. There are people who get traditional Medicare and don't get a supplement because they can't afford it. For those people, MA probably makes sense. On the other hand, there are plenty of people who can afford traditional Medicare and supplement who do MA as above.

Third, people who understand the disadvantages of MA and can afford traditional Medicare/supplement but are frugal and want to save a dollar. They see the low premium cost of MA and figure they are healthy and want to save money. Their problem comes up if and when they have a health problem that costs them a lot out of pocket or, worse, they can't get the care they need from the doctors they want.

 

[Gotadimple]

Getting back to my follow-up question. Do you think if the rapid growth of Advantage plans over traditional MC continues, it will effectively create a closed book situation for those on traditional MC?

If the current trend continues, I see it as a softer version of closing Plan F a few years ago. Only the older participants will be in traditional MC, causing the rates to increase much faster than the other option (Advantage plans).

Absolutely not! People grow older every day and 'age in' to Medicare. CMS is giving the public several options to choose from:
Traditional Medicare + Part D
Traditional Medicare + Part D and optional Medigap
Medicare Advantage (Part C with or without Part D)

There can never be a time when Traditional Medicare is a closed book because those with MA can always go back to Traditional Medicare. They may not qualify for a supplement plan due to a pre-existing condition, but Part B is always available to them.

As to whether Part F will close some day, that's a CMS issue that will be driven by whether there are insurers who still want to sell it. The government only defines coverage in a medigap plan and approves who can sell it - they have no financial investment in Medigap plans (as they do with MA).

 

[audreyh1]

So Medicare Advantage had been heavily pushed because it was supposedly cheaper for the government, a long-term cost savings. Now it turns out not to be the case. Imagine that!

 

[Flyfish1]

I've got 5 years to go before I have to understand this stuff in any detail. Just curious, what kind of monthly costs are involved with these various plans and supplements?

 

[MichaelB]

I've got 5 years to go before I have to understand this stuff in any detail. Just curious, what kind of monthly costs are involved with these various plans and supplements?

Medicare B premium is the same for everyone, $164.9 this year. Medicare supplemental plan prices, or MediGap, vary widely around the country. You can use the MediGap plan finder at the Medicare website here https://www.medicare.gov/medigap-supplemental-insurance-plans/#/m/?year=2024&lang=en

Enter yiur zip code and look at the plans available in your area.

 

[athena53]

I've got 5 years to go before I have to understand this stuff in any detail. Just curious, what kind of monthly costs are involved with these various plans and supplements?

Prescription, supplement and Advantage plans vary by state and even county but here are my traditional Medicare numbers:

Part A, of course, was paid for through payroll deductions during your career and there are no monthly premiums. My Part B premium is $164.90 plus an IRMAA surcharge of $292. Part D (cheapest I could find, my only prescription is under patent so no good deals) is $11.20 plus $22.40 IRMAA. Supplement (United Healthcare through AARP) is $229. Most people pay only 75% of what their prescription and Part B plans really cost and the rest is subsidized by taxpayers. IRMAA surcharges take away part or all of that subsidy for higher-income beneficiaries.

My concern about Medicare Advantage plans include limited networks, "gatekeepers" to specialists and the big dealbreaker that if you decide to switch back to traditional Medicare you may be rejected by supplement carriers or have to pay a surcharge. Which means that I can be perfectly happy with my Advantage plan but if it deteriorates or if I develop a health condition and feel I need a wider network and easier access to specialists, it's too late. Fortunately the AARP article raised that point.

Their contention that traditional Medicare should have some of the niceties of Advantage plans- some dental care, gym memberships (which my supplement does have), allowances for groceries, etc., isn't convincing to me. The added cost of many of these features is minimal but in the case of Advantage plans, where the provider is paid a fixed amount per capita, they take away fo rmoney available for actual medical care.

 

[Sunset]

I've got 5 years to go before I have to understand this stuff in any detail. Just curious, what kind of monthly costs are involved with these various plans and supplements?

medicare part A: free
medicare part B: $164.90 per month per person.
medicare supplemental plan varies by plan: mine is G and costs $125/mo.
medicare part D (Drugs): varies a little mine costs: $8 / mo

My income is too low to pay IRMMA extra costs..