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Shopping for a Medicare Advantage Plan — Once Again!

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I have just done something I said I would never do: shop for a Medicare Advantage plan to cover my gaps in Medicare. After writing a seven-part series three years ago when I turned 65 and found signing up for Medicare was exhausting, frustrating and confusing, even though I have written about Medicare for 20 years, I said "never again."

This year, though, I changed my mind after reading Tara Siegel Bernard's New York Times Medicare piece where she told the tale of an Alabama woman who had been lured to a Medicare Advantage plan because it had no monthly premium, only to find out that she had to pay a large portion of her medical costs.

"I didn't feel that would give me a sense of ease because of the co-pays and the possible unexpected expenses that can crop up," she said. She enrolled in traditional Medicare, pays $135 a month for a Medigap policy, and, after having a few diagnostic tests, says her decision has paid off as it usually does for millions of other older Americans who often have medical problems at this point in their lives.

"Wow!," I thought. At last the media is featuring a real live person who understands the significant cost-sharing that generally comes with Medicare Advantage plans and who notes the downsides of this arrangement. Yet, despite those tricky coverage loopholes, the low or even no monthly premiums of Medicare Advantage plans appeal to many retirees and drive their growing popularity.

The usual flyers and brochures from sellers of Medicare Advantage plans began to arrive in the mail. One nearly fooled me. It said, "Medicare Health Plan Information Important Information Regarding 2015 Changes Enclosed." For a moment I thought it was Medicare contacting me that I had to pay a higher Part B premium.

Nope, it was a "lead card" used by insurance agents and brokerage firms to collect names of sales prospects who are instructed to give their name and phone number and send the card to the National Reply Center in Indianapolis. Similar pitches from the National Reply Center have been used for years. The other two brochures came from Empire Blue Cross and UnitedHealthcare.

Empire's pitch offered $23 premiums and said to ask for details. I did and got none. The phone intake worker said I had to give some personal data to get specific information from an agent on the phone or to have an agent contact me directly. Or, she said, I could attend a seminar, one of those coffee klatches insurers have where they talk co-pays and deductibles over scrambled eggs and coffee and sign people up.

United's brochure was classier. It was a personal "invitation" to save the date for a special event — one of those coffee klatches — to learn about $0 premium plans. The invite did say "limitations, copayments and restrictions may apply." I was curious about coinsurance and checked the Medicare handbook. Indeed there was 20 percent coinsurance applied to chemo drugs, other Part B drugs, and durable medical equipment. Those are high-ticket items and insurers are eager to transfer some of the cost to beneficiaries.

I called United to find out more. This time I did get through to a representative who answered my questions — sort of. The restrictions, he said, were that I had to have Parts A and B of Medicare. I was expecting some discussion of restrictions on number of visits, the kind of thing common in insurance policies. I had to press him on what the 20 percent co-insurance meant. He thought for a second, then said I would have to pay 20 percent of the bill. That can amount to a whole bunch of money if you are taking some of those uber-expensive cancer drugs. That's usually not part of the sales pitch.

Perhaps the most useful thing he said was that drug expenses wouldn't count toward the maximum out-of-pocket amount I would have to pay. I asked about the plan with a $6,700 out-of-pocket maximum, because that squared with the zero premiums United's "invitation" mentioned. That amount "is strictly medical" expenses, he said.

Now that's important information. That sort of fine print is often overlooked by shoppers and brushed over by sales reps during the coffee shop pitch where attendees are often more interested in whether their doctors are in the plan than in details of coverage that can trip them up later.

He wasn't too informative when it came to the drug benefit, but neither was the Medicare handbook. You have to dig deep into company and government websites to find out if your drugs are covered and how.

Short of going to a seminar and asking reporter-like questions or having someone from one of the Medicare advocacy groups help you or maybe a Medicare representative on the phone, you're stuck in an information swamp. No wonder studies show that Medicare beneficiaries are not eager to shop around even if they can get a new policy with a smaller monthly premium.

It’s not just about the monthly premium. With Medicare Advantage plans, the costs to really watch for are those co-insurance amounts, tricky formularies and drug tiering arrangements, and you won't find out which plan is really cheaper until you start using it and learn how it works when you get a chronic disease or a life-threatening illness. Both of which are highly likely as we age.

There is one bright spot in the shopping process. Medicare is listing online the fines and penalties assessed against sellers of Medicare Advantage plans. Pay attention to that list because some of the insurance company household names are on it. The violations say a lot about how they do business.

Nearly two-thirds of Medicare's audits of the plans found "inappropriately rejected claims" for prescription drugs. They enforced "unapproved quantity limits" and made patients get permission before filling prescriptions even though this kind of prior authorization was not allowed.

Once again my shopping trip showed that it's still buyer beware!

More Blog Posts by Trudy Lieberman

author bio

Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website, CJR.org, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.


Tags for this article:
Medicare   Inside Healthcare   Health Insurance   Medicare/Medicaid   Trudy Lieberman   Health Care Cost   Pay for your Health Care   Aging Well  


Comments on this post
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Dennis Byron says
October 16, 2014 at 4:59 PM

This article has an odd premise. The author claims to shopping for “a Medicare Advantage plan” because a woman in Alabama (see Note) who was quoted a few weeks ago in The New York Times had switched from public Medicare Advantage to private Medigap as her supplement. So why didn’t the author shop for a private Medigap plan instead of a public Medicare Advantage health plan?

As for the plans whose details the author says he or she could not get over the phone, it only took me 5 minutes online. The details on Empire's $23 a month plan are pretty straightforward and it’s hard to believe any “intake worker” had trouble explaining them. It would depend where the author lived but if he or she lived in New York County, NY, the plan’s a standard HMO with no medical-services deductible, pretty common co-pays (e.g., $20 to see your PCP), a built-in Part D plan with a $247 deductible, some health/vision/wellness benefits not included in Original Medicare, a $6000 OOP limit on medical services (there is no limit on OOP with Original Medicare usually even with a private Medigap plan). Naturally there is no out of network coverage (it’s an HMO, which has nothing to do with Medicare). This Empire Blue plan also had an interesting feature that lets the member “skype” with a doctor (not your PCP I’m sure) 24x7. It’s basically an Obamcare bronze plan.

Assuming the author was referring to a United Healthcare zero-premium plan and not an AARP plan, it’s a Regional PPO with no medical-services deductible, better in-network co-pays than the Blue Cross plan (e.g., $10 to see the PCP), a built in Part D plan with only a $225 deductible (plus first dollar coverage for most generics), some health/vision/wellness benefits not included in Original Medicare, a $6700 OOP limit on medical services in-network ($10,000 out of network but again that is literally infinitely better than Original Medicare with or without a Medigap). But United Healthcare had no skyping doctor that I could see. The 20 percent for Part B services is the same as with Original Medicare which is why such a low cost Part C plan is not designed for people needing one or more of those things. It has nothing to do with “insurers eager to transfer some of the cost to beneficiaries.” There are 39 other plans in New York County and I’m sure one would be better for someone with such special needs.

I never heard of any insurance policy that had “restrictions on number of visits.” Perhaps the author was thinking of the restrictions in Original Medicare on number of hospital days covered lifetime and per-incident and the number of days covered in a skilled nursing facility. All Medicare arrangements – both for traditional fee for service Medicare and capitated-fee Medicare Advantage – and all insurance for people not of Medicare age – such as Obamacare insurance -- have “co-insurance amounts, tricky formularies and drug tiering arrangements.” Again this has nothing to do with the choice of a Medicare Advantage plan.

NOTE: the lady from Alabama in The New York Times bought a private Medigap supplemental policy for about $135 a month that covers items like deductibles and her share of each bill to replace her zero premium Part C plan. The Times says she said "After having a few diagnostic tests this year, (my) decision already paid off. Had I been on the Advantage plan, I would have had to come up with the money for each test." It's true she would had co-pays but it is hard to believe a few diagnostic tests would have cost more than the additional $2000 the woman from Alabama spent on private Medigap insurance and a standalone prescription drug plan after she dropped her zero premium Part C plan. Maybe $500 would be the most: two outpatient procedures, each with a $250 co-pay on the zero-premium plan. But more likely two doctor visits at $50 each. But it’s a free country.

Farida says
October 19, 2014 at 11:34 PM

I am 100% with you, I am from Florida, and encounter many beneficiaries from up north coming here with a supplement/medigap, after learning how Medicare advantage plan works they ditch their medigap and seek Medicare advantage plans. With medigap you pay a monthly premium regardless if you use the plan or not, then you have to pick up a Part d plan. With most Medicare advantageplans you are covered for hospital, medical, drugs, some dental, some vision (optical) some hearing aids, Gym membrship. There is no monthly premium, you pay a small copayment only when you use the service, 0 for PCP, about $25 to $40 for a specialist, and a copayment for hospital stay. It is a HMO which means that you have to stay within the network, but you are covered anywhere in the US in an emergency (Pros for the Medigap, the plan allow you to anywhere, good for snowbirds) Lets get serious, our seniors live on a limited budget, don't travel a lot, even if they visit family out of the area they are covered in an emergency. I have my parents on a Medicare Advantage plan and would not have it any other way, they have their PCP that coordinates all their care, which means that if they go to a specialist the PCP have to know the result and what is proscribe. On a typical year it may cost each parent no more than $200 per year in specialist and other small copayment. (both diabetic) keep in mind that these plans have a maximum out of pocket, $3400 to $5000 depends on the company. ( so there is a ceiling, unlike original Medicare) I am not knocking Medigap, Medicare Advantage is to for everyone, but I live amongs seniors that can barely make ends meet let alone a monthly premium.