Obama administration officials and the president himself have been on the road selling the benefits of health reform.' The other day in Maryland the president was touting the $250 rebate sent this week to some three million Medicare beneficiaries whose prescription drug expenses have reached the infamous donut hole where there is no coverage.
But millions more will be affected, perhaps adversely, by changes the new law brings to Medicare Advantage plans which more than fourteen million seniors have flocked to in recent years.' MA plans, as they are known for short, give seniors their basic Medicare benefits for hospital and physician services as well as a bunch of extras like eyeglasses, dental care, and reduced cost sharing.' Sometimes monthly premiums are lower than they would be for traditional Medigap policies, and sometimes the plans charge no premium at all.' So it's not hard to see why seniors like them.
Insurers have been able to offer such goodies because the government has been overpaying them'giving them more than it costs to provide the same benefits than under traditional Medicare.' Health reform, however, stops the government's gravy train, meaning that MA plans will have to scale back their extra benefits or raise premiums or both.' This week I talked to consulting actuaries who have prepared the rate calculations for MA plans insurers will offer this fall.' They explained that many seniors will see their extra benefits disappear, or they will have to pay more for them. That's financial reality, they say.
However, the words from the president, who strongly supported cutting overpayments to Medicare Advantage plans, and Secretary of Health and Human Services Kathleen Sebelius have been spinning the issue differently.' They've been using carefully crafted phrases to make seniors think that their Medicare benefits are safe.' They are, of course, depending on what you mean by benefit.' At least for now, the basic benefits'Part A for hospital services and Part B for doctor and outpatient care---won't be touched, and seniors will get some free preventive services.
Administration officials haven't been eager to talk much about the bad news for those with MA plans.' That omission gives a misleading impression of what's really going to happen.' At his Maryland town hall meeting Tuesday, the president told seniors that 'What you need to know is that the guaranteed Medicare benefits that you've earned will not change whether you receive them through Medicare or Medicare Advantage.'' And a brochure sent recently to all beneficiaries tells them:' 'If you are in a Medicare Advantage plan, you will still receive guaranteed Medicare benefits.'' There's no discussion of cutting the extras.
To most seniors, a benefit is a benefit.' They've never really understood how Medicare works so many miss the distinction between guaranteed benefits and ones that are not.
My advice to seniors right now: Check your policies and see what special benefits and services your plan is now providing and what you would do if some of them disappear'like no more dental check-ups or' making you pay more cost sharing.' As the new policies begin to come onto the market in the fall, we'll be giving suggestions for coping with the slimmed down MA plans.