What is Medicare Advantage?
Medicare Advantage, also known as Medicare Part C, has become more and more popular as an alternative to traditional Medicare. As of 2022, 48% of Medicare users had a Medicare Advantage plan. This is an increase from 22% in 2008*.
What is the difference between Medicare Advantage and traditional Medicare? How do Medicare Advantage insurers profit off our confusion? How do I know what kind of Medicare plan is right for me?
What is the Difference Between Medicare Advantage and traditional Medicare?
Medicare is a federally funded national insurance plan for people over 65 years or with certain disabilities. Traditional Medicare, along with the most comprehensive Medigap supplemental plan, covers up to 100% of outpatient care and does not limit your network of doctors. Because you are 100% covered, you know exactly how much you are going to pay. As an alternative to Traditional Medicare, Medicare Advantage offers vision insurance, dental insurance, some fitness perks, and some plans offer a $0 premium. There is a limited network of doctors, and some procedures require prior authorization. Private insurance companies determine how much of the cost they will cover and how much the patient will have to pay for hospital stays, doctor appointments, procedures, and prescriptions.
Medicare Privatization - How Do Medicare Advantage Insurers Profit Off Our Confusion?
Health insurance is confusing!
In recent years, Medicare Advantage insurers have been accused of overcharging the federal government and limiting patients’ care. Medicare Advantage plans have been shown to receive 22% more money than they use for patient-care**. They do this through cherry picking, upcoding, and lemon dropping.
Medicare Advantage providers can cherry-pick the healthiest and least expensive patients to insure. by providing certain incentives, like gym memberships, to people looking for Medicare Advantage plans. People with chronic health conditions, who need to go to the doctor a lot more, are more likely to have other priorities when looking for healthcare coverage. Because Medicare Advantage offers perks like low premiums, they charge more money per service: an option that does not work for those of us who need health insurance the most. Medicare Advantage providers have also been known to create barriers to coverage for people with disabilities to keep them off of their insurance plans. In addition to leaving traditional Medicare further strained, Medicare Advantage providers mislead the federal government to receive additional funding.
Medicare Advantage insurers get paid in a lump sum per person, weighted to account for each person’s pre-existing conditions. This gives insurers the incentive to upcode, to report to the government that their patients are sicker than they really are. People on Medicare Advantage have been shown to report a 20% higher risk score for patients compared to people on traditional Medicare**. Insurers do this by reporting all historical, irrelevant, or in some cases, false medical history. Not only does this mislead the government and overcharge taxpayers, it saturates providers with irrelevant information that complicates their task as a healthcare provider. Most people receive less care than insurers are paid for.
Medicare Advantage insurers are paid in a lump sum and use a practice known as lemon- dropping to deny patients care. Medicare Advantage companies require what is known as prior authorization for more expensive procedures. This means a doctor must submit a request to the insurance company before a patient is approved to receive the care the doctor has ordered. These requests are difficult and tedious. It is easy to make a small mistake and have the request be denied. Patients don’t see that medical teams are having to hire people, known as medical coders, specifically to handle prior authorizations and their many possible errors. Once a prior authorization is received, it is run through a computer system to see if what the doctor ordered is correct for the diagnosed condition, a task that has already been done by the healthcare provider! There have been cases of people suffering failing health conditions and even dying while waiting for a prior authorization to go through. These big insurance companies know that they make money by overcharging and undercovering.
What Kind of Medicare Plan Should I Get?
For many people, a Medicare Advantage plan would work well. The problem is that once you enroll in a Medicare Advantage plan, after a certain amount of time (usually one year), you give up your guaranteed issue right to a Medigap plan and would need to be reapproved. There are many scenarios where people feel that a Medicare Advantage plan is right for them and then later find out they have a chronic health condition. What used to be a cheaper plan because of low premiums has now become a much more expensive option. In this way, some people become trapped in a Medicare Advantage plan and end up paying much more than they originally predicted and significantly more than they would have paid on traditional Medicare.
In some cases, a Medicare Advantage plan can be the correct choice for people but it can be difficult to navigate through the many different options. SHIBA, Senior Health Insurance Benefits Assistance, offers free one-on-one counseling to Oregonians trying to decide what insurance plan is best for them.
*The History of Medicare Advantage: From Inception to Growing Popularity (healthpayerintelligence.com)
**PNHP