Although I don’t mention it very often, I’m also schooled and credentialed in Health and Life Insurance. Therefore, I’m taking the opportunity to speak to “Medicare Advantage Plans”, which may or may not be a good choice for you.
I think it’s safe to say that the ads I’ve seen on TV in the last few years attempt to “fool” people into thinking they will receive free benefits from what they’re calling “Medicare Advantage Plans.”
Of course, nothing is free. Medicare Advantage Plans are actually underwritten by companies separate from Medicare and operate as either an HMO or PPO. You may recall years ago that when these plans first appeared, they involved deductibles and coinsurance, which today’s Medicare Advantage Plans do as well.
Medicare Advantage advertisements seem to suggest that there is no premium, and insureds get free dental, vision, hearing and other benefits. The ad that says, “I want what I’m entitled to” doesn’t really tell the whole story. Although there is usually no premium for Medicare Advantage Plans (that’s true), the downside is that the Plans are really “pay as you go” with maximum out-of-pocket costs from $4,000- to over $6,000. This means that insureds must pay all or most of their health care costs until they reach the maximum out-of- pocket amounts. If an insured is relatively healthy, there is very little cost, but if the insured requires regular and frequent health care, they pay and pay until they reach the maximum out-of-pocket.
In addition, since Medicare Advantage Plans are really HMO and PPO plans, treatments recommended by treating physicians require prior authorization and referral. This can really be a drawback when treatments are not approved by the insurance companies. As a result, even though Medicare Advantage Plans might include Part D Prescription Coverage, Supplement, or Medigap Plans are the preferred and most frequent choice.
Medicare Supplement (Letter G, N etc.), or Medigap Plans do not operate as HMOs or PPOs and do not require constant referrals and authorizations from treating physicians. Although there is a premium for the Plan you choose, and some say the premiums are expensive ($167/mo), there is only a $226 deductible, and the Plan covers the rest of your health costs. (Plan G) Medicare Supplement Plans do not cover Vision, Dental or Hearing costs, but most people buy their own insurance so that all of their health care and dental costs are covered.
Therefore, Medicare Advantage Plans are not for everyone, and the ads on TV are misleading as to what has to be paid for health care during the year. These Plans are sold suggesting that you get “Everything you are entitled to from Medicare”, which is not true.
Medicare Part A includes co-pays, usually covered in part by Medicare Part B. What is not paid by Part B is generally covered by the Supplemental Plan. With Medicare Advantage Plans, the insured continues to pay health care costs up to a maximum out-of-pocket amount, which can be significant.
Another disadvantage to Advantage options is that when insureds want to change to a Supplemental Plan or vice versa (after the first choice at 67, let’s say,), insurers will do medical underwriting, and insureds could be turned down for coverage that they think they want.
All I am saying here is that Medicare Advantage Plans aren’t for everyone, and TV advertising is extremely misleading. It is very important for someone entitled to Medicare that they understand what costs they will be responsible for under Medicare Advantage HMO/PPO Plans.
If insureds are subsequently unhappy with the Medicare Advantage and want to change to a Supplemental Plan, they may be refused because of medical underwriting. Please be very careful with this and make sure you are making the best choices for you.
