Medicare Advantage (MA) doesn’t cheat the buyer. It cheats the payer (the government).
For the vast majority of people that buy MA, it is an outstanding deal - in fact it is most often free.
Of course, it is not free if you need care but it still might be more cost effective than a traditional Medicare with supplement - especially for those of low income.
In 2023, more than 7 in 10 (73%) enrollees in individual Medicare Advantage plans with prescription drug coverage pay no premium other than the Medicare Part B premium, which is a big selling point for beneficiaries.
It offers mediocre coverage compared to the typical group employer plan. As noted above, Medicare has an actuarial value of about 84%, while the typical group employer plan is north of 90%. Different plans vary, of course, and some employer plans will have lower AV’s than others - but on the whole, Medicare will generally cover a lower percentage of your health expenses than typical workplace policies. That’s one of the reasons why it’s so hard to make the financials of converting to universal single payer work - the “basic” version of Medicare is less expensive, in part, because it covers less than the average plan, and so you have to “boost” Medicare coverage in order to make it so people don’t have a worse plan when they get switched over.
Agreed, and a big improvement for many people. So many ridiculous excuses were used as preexisting conditions by insurance companies to not pay benefits. Acne was a preexisting condition.
That certainly was a risk. Having a pre-existing condition definitely used to bar people from obtaining individual health insurance policies. But although that was something that was frequently discussed as a benefit of the ACA, there were an awful lot of people who didn’t have health insurance because they simply couldn’t afford a policy in the first place.
The ACA slashed the number of uninsured in this country. We used to have about 18% of the non-elderly population lack insurance; now that figure is below 11%. But the lion’s share of folks that have insurance coverage because of ACA provisions gained it through Medicaid expansion (a little north of 60% of ACA coverage). And a non-trivial portion gained coverage because their ACA exchange plans are subsidized to the point of being free or nearly free.
The ACA was built to provide coverage mostly by having the government pay for people to be covered: through Medicaid expansion and through subsidizing exchange policies so that insurance companies had enough money to cover the small (but expensive) population of folks with costly pre-existing conditions. Which is why it’s so successful - in states that expanded Medicaid, uninsured rates among citizens are exceedingly low. But they’re still very high among undocumented populations that are not eligible for either Medicaid or exchange policies - close to 50%, compared to 6% of naturalized citizens and 8% of native citizens.
While the ACA’s regulatory provisions regarding pre-existing conditions are certainly a boon for the folks who were in that particular situation, the primary impact of the ACA was to expand health insurance coverage by having the government pay for it - in whole or in substantial part.
Medicare Advantage cheats the taxpayer.
Medicare Advantage is cheaper for the senior while healthy. Much cheaper.
But Medicare Advantage has large out of pocket exposure in my region $5300-$9500. As a person ages more health care is consumed and more expensive for the beneficiary. Or a person develop a serious medical condition. Your cost can be widely variable. In the best instance it could half the cost of traditional Medicare. In the worse instance it could be 5 times traditional medicare.
You can switch to traditional medicare from medicare advantage but then you still have the 20% uncovered cost. Good luck trying to obtain a medigap policy to cover that 20% when you have serious medical condition.
Start viewing at 8 minutes into the video. She goes through cost examples.
And one must remember there is a disturbing news stories about some hospitals not accepting patients with Medicare advantage plans.[1]
Malarkey. The taxpayer - through their elected representatives, authorize MA to be subsidized in much the same way that they authorize subsidies for EVs, for equities (favorable tax on divs and cap gains), and for home ownership (tax subsidies for interest and property sale).
But Medicare Advantage has large out of pocket exposure in my region $5300-$9500.
From my link above:
In 2023, the out-of-pocket limit for Medicare Advantage plans may not exceed $8,300 for in-network services and $12,450 for in-network and out-of-network services combined.
Yes, if you need serious care, you may be stuck with a large bill but that may be a welcome risk/alternative for some when compared to otherwise paying $2000+ a year for health insurance - and still having out of pocket expenses.
We had a thread about Medigap coverage a few weeks ago. I noted that I picked a high deductible plan, something like $2700/year deductible, from Blue Cross of Michigan $101/mo for a 70 year old. I picked Blue Cross because it was the cheapest, that was from a company I ever heard of. There were other plans for $50-$60/month.
Others on this board recommended another company, that is available to me. iirc, it was United American Insurance, in McKinney, TX. The same plan I have from Blue Cross would cost $50-something from United American, a little more than half what I pay Blue Cross. Now that I know it is a reputable company, I plan to revisit this issue next year.
Folks on this board, please confirm whether I am remembering the company correctly. Was it United American that was highly recommended?
Oh horse hockey!! Republicans deliberately crippled ACA to block its success. It was the best opportunity for universal heath care in the US.
Success required penalties for failure to carry insurance. That would cause healthy young adults to buy insurance and finance the rest of the program. Those with preexisting conditions found it attractive to insure after they were diagnosed. That made policies costly with high deductables. Not attractive to the young.
When Congress gets its act together it can do some patching and maybe make it work better.
Sure it does. About 13% of the claim denials are for items that by law a Medicare Advantage insurer must cover.
{{{ By law, Medicare Advantage plans are supposed to base their reimbursements on Medicare rules. But there’s room for interpretation, says the Department of Health and Human Services. For example, insurers can use their own clinical criteria to determine whether to authorize or pay for care. A report last year by the department’s Inspector General found that in June 2019, the 15 top Medicare Advantage plans denied authorization for 13 percent of claims that had met Medicare rules. The plans also denied payment for 18 percent of claims that met Medicare coverage and billing rules, the report said. }}
You definitely don’t want a $30 million/yr health insurance CEO between you and your doctor.
There’s not a lot of difference between 84% and 90%. It doesn’t even cover the spread between admin costs (Medicare 1.3% vs. 10% for a large private employer and 20% for Obamacare.) And my time is very valuable. I don’t want to be on the phone with my for-profit insurer trying to get the health care I paid for. You have to be compensated for the time and hassle of dealing with a for-profit insurer.
That was me. United American sells policies in 49 states and tends to be the cheapest since they pay the lowest sales commissions. Thus, if you’re using an insurance agent/broker to help you with your Medicare, you’re unlikely to hear about them.
Remember, all Medigap policies are the same. Medicare (CMS) does all the benefit administration, claims and accounting. The Medigap insurer just pays what Medicare tells them to pay. There’s really no way for Blue Cross to charge you double the price for “superior” service. They’re just running a scam and paying a higher commission to the insurance agent.
Minimizing the “skim” – the key to retiring early.
If you’ve got lots of resources, then sure. Some people would rather eat a few hundred dollars than have to have phone calls with an insurer. But most folks will get very unhappy if they get less coverage if moved from a private insurer (again, north of 90% AV - I’ve seen estimates from 92-94%) down to Medicare (84%). Which is why it’s so costly to set up a single payer system.
Actuarial value isn’t administrative load. It’s a measure of the proportion of expected health care costs that will be paid for by insurance. So for “classic” Medicare, about 84% of health care expenses are paid for by your insurance. With private policies, it’s (on average) over 90%. That’s different than administrative load, which is roughly the proportion of your premiums that isn’t paid out in claim coverage.
I started in this industry selling Medicare policies door to door for United American Insurance in 2002. I have no idea if they are the “lowest” in sales commission today but if they are still priced anything like they were in 2002, I seriously doubt it. ACA changed the game entirely since then but I can guarantee you that they were not the lowest in 2002 - I certainly would have worked for them if that was the case.
Medicare currently costs the Gov’t about $12,000 per beneficiary and spends 1.3% of that ($156/yr) on admin costs. That $11,844 in medical services purchased was bought at the Medicare reimbursement which is less than the reimbursement rate a for-profit insurer will negotiate with a doctor or hospital. If a for profit insurer is paying 50% more than the Medicare rate for services, and covers 10% more procedures since it’s a “luxury private plan, not that cheap Medicare”, the premium cost is going to be at lot higher.
$11,844 x 150% = $17,776
10% more covered services = $1,778
10% admin rate for private employer ($17,776+$1,778)x 10% = $1,955
$17,776+$1,778+$1,995 = $21,549
And your “study” is telling you that if Medicare was running the show it would be more expensive? The arithmetic doesn’t add up.
And on top of paying $21,549 for “private insurance”, I’m going to be on the phone with them trying to get the health care I paid for? – F that.
Maybe they weren’t the lowest in 2002 but they are today. If you want a United American medigap plan you call their 800 number and they’ll take you name and have one of the high-volume boiler rooms they contract with call you back within 24 hours to sell you the policy. I doubt there is anyone selling United American medigap plans door-to-door.
I don’t think the ACA had anything to do with Medigap policies, unless the 20% skim rate on the ACA meant they were able to offer higher commissions to insurance salesmen, so less of them bothered to sell Medigap. There are only a few insurers that even offer the high deductible Plan G medigap policy, precisely because the commissions on that are so low compared to other polices. It’s all about the “skim”, baby.
No - again, you misunderstand, but I don’t think I was being clear.
Private insurance (typically) will cover a little more than 90% of medical expenses, compared to Medicare’s 84% (all told). So if you want to convert from private insurance to a “Medicare for All” system, you’re not going to be able to maintain that discrepancy. You’re going to have a new system with a single AV that will (probably) be at least as good as the average AV for private insurance. Because if you reduce coverage for more than half of the people that are on private insurance, they will get very mad. Which is why MfA proposals (like Sanders’) tend to be - have to be - much more generous than existing Medicare.
But that means that your existing Medicare beneficiaries go from mediocre coverage to very generous coverage - which comes at an expense. Which makes it harder to pencil out the financials, because that expense on the Medicare side eats into whatever savings you might be getting from converting the private side to Medicare.
That’s why it matters that vanilla Medicare is somewhat mediocre insurance compared to private policies - if we switched to a MfA system, it might reduce what we pay for the private side, but it will probably increase what we pay on the existing Medicare side. To say nothing of the impact on Medicaid expenses once all those folks get folded into a much more generous system.
I don’t know how United American’s system works now. I went to the Medicare web site, and had it pull up a list of the companies offering the high deductible plan I wanted. I clicked on the link to apply to Blue Cross. iirc, it schlepped me over to a page on BC’s web site, where I filled out the application. A few days later, I received an e-mail that I had been accepted. A week or so later, I received the card in the mail.
