No, Medicare Advantage is definitely not Medicare

Every evening listening to the news, I am bombarded by advertisements leading me to believe that Medicare Advantage is a Medicare program.  Alert! Medicare Advantage is not traditional Medicare.

Medicare Advantage is a private, for-profit insurance plan. The federal government uses our taxes to pay the insurance plan a fixed amount for every customer in the plan, and only requires the insurance company to spend 85 percent of the money on health care. The rest is for expenses like advertising and profit for the Medicare Advantage plan. 

The idea behind the plan was to restrain medical costs. In order to restrain costs and increase their profits, however, Medicare Advantage plans — unlike traditional Medicare — only pay for services within a restricted network limiting your choice of doctor, and require pre-authorization for services allowing them to deny services your doctor may approve. New York Times writer Reed Abelson quoted a 2018 inspector general’s report that found 13 percent of the requests denied by Medicare Advantage plans would have been covered by Medicare.

In 2019, Advantage plans refused 18 percent of payments meeting Medicare coverage rules, an estimated $1.5 million in payments. The profit motive is driving the nightly advertising onslaught.

The advertisements attempt to convince consumers that Advantage plans are Medicare plans. A speaker urges viewers to call a number to “make sure that you are getting all the benefits you deserve. You may be entitled to vision, dental, and zero premium benefits,” the speaker claims.

The ad may be repeated two or three times in succession, telling me to call the number, repeating “Medicare” three times, but never mentioning “Advantage.” Fortunately, starting next year, the Centers for Medicare & Medicaid Services will begin requiring approval of Medicare Advantage television ads, according to an October report in Fierce Healthcare.

Many consumers are in a quandary as to whether to choose traditional Medicare or Medicare Advantage, and which of the numerous Medicare Advantage plans to select should they choose an Advantage plan.

What criteria can they use? We cannot know the future or with any specificity the particular ailment or accident that may befall us. The only “reasoned” decision a consumer can make is based on what they can afford, and too many people cannot afford to be adequately insured.

A recent poll by the Kaiser Family Foundation found “in the past five years, more than half of U.S. adults report they’ve gone into debt because of medical or dental bills” indicating they are “under-insured.” An excellent Consumer Reports article from November cautions ”some people in Medicare Advantage end up paying unexpectedly high costs when they become ill or find their network lacks the providers they need, says Tricia Neuman, senior vice president at Kaiser.”

There is help for the consumer. The Consumer Reports article recommends contacting the Medicare.gov website. And, “perhaps the best resources, however, are the federally funded State Health Insurance Assistance Programs, where trained volunteers can help consumers assess both Medicare and drug plans.”

According to the Report, these programs “are unbiased and don’t have a pecuniary interest in your decision making, David Lipschutz, the associate director of the Center for Medicare Advocacy noted. But their appointments tend to fill up quickly at this time of year, and the annual open enrollment period ends on Dec. 7. Don’t delay.”

And now, the New York Daily News, in Elliot Raphaelson’s “The Savings Game,” recommends “If you want unbiased advice regarding purchasing Medigap or Medicare Advantage plans, you can request advice from a representative of your State Health Insurance Assistance Program. You can obtain your state’s contact phone number from the internet or from the back of your Medicare handbook.”

Costs do increase, putting doctors, hospitals and even insurance companies under pressure to increase profits. It is worth spending a fortune on advertising if you can increase profits. To prevent excessive increases for profit, oversight is necessary, and adds to the costs.

Legislation is being considered in several states for universal health care paid by the state directly to the provider. Here, the New York Health Act would if passed eliminate or drastically reduce private insurance for health care. However, as long as consumers must depend on for-profit insurance companies for health care, caveat emptor.

Let the buyer beware!

Fortunately, according to Fierce Healthcare’s Robert King, “insurers will not be able to air any television ads for Medicare Advantage plans before getting approval from federal regulators.”

A huge thank you to the state legislature for passing the End Medical Debt law that at least protects consumers in New York state from liens on their homes and garnishes on their wages.