Make informed decisions when choosing Medicare Advantage plans

Ugh! Medicare open enrollment season is here again. We are being deluged with TV ads from various celebrities about the benefits of the many different Medicare Advantage programs available. Most offer dental care, hearing and vision coverage, (and other perks). Remember, there is only one reason that the companies offering these programs are advertising them so heavily: They make money for the companies.

Medicare Advantage plans are referred to as Part C Medicare and typically provide coverage for most medical expenses, including hospital care (Part A) and outpatient services (Part B). Ninety percent have a prescription drug plan (Part D). The amounts of co-pays, deductibles and caps on expenses vary widely by plan. The popularity of these plans is growing; 42% of Medicare beneficiaries are now enrolled in one. Patient satisfaction is generally quite good, and some people save money by joining one while receiving some of the additional benefits.

This is how these programs work: Medicare, which is funded by taxpayer dollars and monthly insurance premiums, pays the Medicare Advantage program nearly $12,000 for each person enrolled each year. The actual amount varies by region and by the medical complexity of the covered patients. The Medicare Advantage company is then responsible for paying the annual medical expenses of those enrolled. If the company does it for less than $12,000 per patient, it makes a profit. Nationally, Medicare Advantage programs, which are usually owned by large insurance companies, averaged more than $1,600 in profit in 2019 for each enrollee.

Medicare originally funded these private Medicare Advantage plans in order to save money for the Medicare system and to postpone the impending bankruptcy of Medicare (Part A Medicare will be running a deficit starting in 2026). Medicare Advantage has actually been more expensive than traditional Medicare. Privatizing the Medicare system by using these programs has not worked out as planned. The savings Medicare Advantage generates goes into profit for the insurance company, not toward securing Medicare’s future.

Medicare also hoped these managed care programs would increase the quality of health care that people received, including more preventive services and better care for chronic diseases. Some programs have been successful, but overall, there is no convincing evidence that quality of care has improved over traditional Medicare.

What are other problems with Medicare Advantage plans? They restrict choices to certain doctors, hospitals, and nursing homes within their chosen network. Traditional Medicare does not restrict your choice. If you choose a plan, make sure your preferred providers and hospitals are in the network. Otherwise, you might get stuck with large out of network charges. You may not be able to go to your preferred skilled nursing home for rehabilitation after a total knee replacement unless that facility is in your plan’s network. Getting an MRI or CAT scan may be more difficult, since the insurance company will have to approve it first.

Drug coverage plans vary widely; it is important to verify that the medications you take are covered by the plan. It is not unusual for plans to deny coverage for expensive drugs such as the newer blood thinners and diabetes medications, resulting in high “out of pocket” expenses. Similarly, many find the dental, hearing and vision coverages are not what was promised in the ads.

It is extremely important to read the fine print and ask questions before signing up for a Medicare Advantage plan.

You want to know exactly what you are getting and what you are giving up. You can compare plans in your area at medicare.gov. Your doctor’s office manager is a good source of information on the various plans. Time spent researching your choice and navigating this complicated decision will be well spent. Good luck!