Wednesday, October 27, 2021

Is Medicare Advantage for Suckers?

I guess I've insulted those on Medicare Advantage plans by calling them them suckers. Let me back out of this a little by saying that if you have a complete understanding of Medicare Advantage and still signed up for it, I am wrong to call you a sucker and I apologize!

Having said that, I am convinced that most people who have Medicare Advantage or are considering it have no real understanding of it because of the extremely deceptive advertising practices throughout the insurance industry.

In my opinion, if you really understood Medicare Advantage, you may well want to switch to Original Medicare (if possible) or avoid Medicare Advantage as an initial choice upon reaching 65. Indeed, there are those like liberal commentator Thom Hartmann who believe that Medicare Advantage Is a For-Profit Scam - Time to End It

Medicare Advantage is a massive, trillion-dollar rip-off, of the federal government and of taxpayers, and of many of the people buying the so-called Advantage plans.

It's also one of the most effective ways that insurance companies could try to kill Medicare For All, since about a third of all people who think they're on Medicare are actually on these privatized plans instead.

I have no financial interest in what you choose, but hope after reading on, you will make an informed decision whatever it is.

'Tis the season! Not just the holiday season but for the health insurance industry, something far more important - open enrollment season for Medicare Advantage, October 15 to December 7. The media is saturated with seemingly non-stop ads for Medicare Advantage. And just about all of them are deceptive in their own way. This is what pissed me off enough to do this blog posting.

It's important to note that there are no outright lies in any of the ads. That might get them in trouble! Instead, they are an endless stream of true but deliberately misleading messages.

Examples? Check these out!

Need help deciding on a Medicare plan? Call and talk to me, your [insert insurance company] Medicare advisor!

An advisor is understood as being a source of unbiased advice on selecting the right Medicare plan for that person. But this so-called advisor is paid to get you to sign up with the company that pays his salary. The word 'salesman' is a lot more honest.

[Here in the Pittsburgh area] If you sign up with the UPMC for Life [Medicare Advantage] plan, you get access to all of the world class UPMC doctors and hospitals!

True enough but misleading. Virtually all of the UPMC doctors along with most others accept all Medicare patients. So you don't have to enroll with the UPMC plan to get access to these same doctors.

The worst is all of the claims of what you can get for free from many Medicare Advantage companies. $0 monthly premiums. Free dental. Free vision. Free fitness club memberships. Free rides to the doctor. Some even promise to refund the $148.50 per month that is deducted from monthly Social Security benefits for all who have Medicare. Get all the benefits you have coming to you! Call today!

Everything for free? Unlimited benefits? Does this sound too good to be true? As they say, if it sounds too good to be true, it likely is. It's hard not to notice that these insurance companies are spending ad money by the bushel to get us as customers. Surely, they must be making enough money selling these policies to make them worthwhile. And they are. But how? They certainly don't say so in the ads.

One clue was provided by the UPMC 'advisor' trying to steer me toward one of his Medicare Advantage plans. As long as I stay healthy, I'm saving money with Medicare Advantage. Which is absolutely true! But again, utterly misleading!

The problem is that if you get sick and have to go to the hospital and possibly need surgery, there can be some nasty copays on the back end. They are going to get their pound of flesh one way or another! There is a usual annual out of pocket maximum of about $6,700. But if your illness lasts into a second calendar year, a new out of pocket maximum kicks in. Getting really sick can trigger some nasty bills. And unfortunately, as we get older, we are more likely to get sick.

I instead pay $120 per month for my selected Medicare supplemental insurance. (This will vary depending on your desired level of coverage.) In addition, I need to buy Medicare Part D prescription drug insurance for about $30 per month. Some of the brand name drugs can be pricey. Regrettably, Medicare is legally prohibited from negotiating drug prices with big pharma. It's not perfect. Medicare Advantage offers everything without requiring separate policies so it's one stop shopping. But despite what is claimed in some of the ads, that doesn't necessarily make it a better choice.

So the bottom line is that I pay more up front in premiums than those on Medicare Advantage. But the back end charges are minimal. I can't afford any financial calamities so this works for me. If the lower up front charges are more appealing and you can afford the possible back end billing, go for it! But make sure you understand how Medicare Advantage really works and don't sign up just based on the misleading ads.

Another major difference with Medicare Advantage is that it's managed healthcare. To keep costs down, patients are restricted to a network of providers and hospitals. Procedures and referrals to specialists beyond basic care can be subject to approval by the insurer. Visits to out of network providers may not be covered at all. Many retirees spend time away from home traveling or staying with friends, children and/or grandchildren. Getting sick while out of town may make covered in network providers inaccessible.

So how about going with the less upfront costly Medicare Advantage at age 65 and then moving to Original Medicare with the Medicare supplemental insurance later on when there is more of a chance of getting sick? Not so fast! In later years past age 65, getting the Medicare supplemental insurance runs into obstacles. There are higher premiums by age and health questions to navigate. Someone with too many health problems may be rejected. On the other hand, new Medicare applicants at age 65 get their choice of insurance plans with no questions asked.

Before I turned 65, I imagined that once I got on Medicare, my health insurance needs would be met and I would no longer have to worry about private insurance. That turned out to be a fantasy. When Congress created Medicare back in the 60s, they made sure that private insurance companies would not be totally left out of the party. Original Medicare covers a lot but the coverage gaps make it an unsuitable risk on its own without either private Medicare supplemental insurance (aka Medigap) or the leap to Medicare Advantage which turns everything over to private insurance with Uncle Sam paying the insurer to take over its coverage.

Negotiating the jungle of private insurance options can be daunting. A site like allows individuals to research and eventually directly sign up with a chosen insurer. But finding a (hopefully trustworthy) insurance agency that works with health insurance is an easier way to go. The cost to the end customer is the same either way.

In closing, I would like to offer the reader the following link: Medicare Advantage Is Cheaper for a Reason - Beware!

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