Excellent advice!
'38Packard
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Last week the subject of Medicare vs Medicare Advantage came up in a group meeting led by a well-known senior living advisor with more than 25 years in the field. She stated that in some cases for very healthy younger seniors it might be cost effective to be in a Medicare Advantage program but if you actually get sick you better be directly in Medicare. Several elderly people in attendance reaffirmed that advice based on their experiences.
Read Intercst’s Medicare posts a couple of years ago and thought he summed it up pretty well.
RAM
8 Likes
Indeed.
Just over 5 years ago, dh was a healthy senior. A VERY healthy senior. Also still working full time (he’s a physician)…his coverage was a group plan via his employer, Medicare part A and, because he chose to listen to “someone who knew” rather than me, part B unnecessarily. Then one day he wasn’t…quite literally.
A routine annual physical revealed an emergent medical emergency that ended with open heart surgery, reconstruction of the root of his aorta and valve. About as non elective as it’s possible to imagine. Everything worked out as it should have and I don’t think the treatment and/or outcome would’ve been different had his insurance coverage been an MA plan…but boy, the cost of it all what with a full 8 days hospital stay plus rehab.
Obviously, given the double coverage, our out of pocket close to zero but 20% of what trad Medicare alone would’ve covered doesn’t bear thinking about…even with the unrealistically low Medicare negotiated payments.
It’s the mercifully rare incidents like this that coverage counts. Unfortunately, all the accounting analysis in the world doesn’t allow for prediction for this type of event.
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Hi,
When I reached 65, I elected to take the part F supplement without the drug plan.
As the years went by, my annual charge for part F kept increasing and when it reached over 2000 per year I decided to go with a medicare advantage plan.
By this time I was well into my 80’s and had a number of doctors that I had been regularly using.
I looked for a plan than included the doctors that I had been using and found several.
Each plan required that I enroll in their drug plan and because I had never used a drug plan, I had to pay $27.50 per month for the drug plan, but nothing for the Advantage plan.
The plan that I use requires a primary care physician who then give referrals to specialists. It costs nothing to visit my primary doctor and $10 for each specialist visit.
The plan guarantees that any expenses for covered services will never exceed more than $2600 per year out of my pocket.
The plan also includes two pair of eyeglasses per year, dental expenses, hearing aids up to $2500 per year.
I am now 91 and am quite pleased with the program.
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That’s great and it’s manifestly “worked” for you. Better yet, you seem to have reached a decent age without major incident. Things are actually changing now for most others.
I suspect that, when you first signed up for MA far fewer seniors were enrolled in the plan and, getting on for 30 years ago far fewer had the sort of long term chronic conditions that are becoming quite burdensome at primary care level. Even if the fees a doctor’s office received for their MA patients fell a bit short, the much greater numbers of patients with trad Medicare and group plans (working people) ended up subsidising them. That’s no longer the case.
I was having a natter with my neighbour earlier in the week and she was complaining about her primary care practice. She and her husband are our age…maybe a year or two younger…and have been MA beneficiaries since retirement at 65. Never had a problem beyond niggling stuff and was always “satisfied” with a big local practice and now they’re not. First of all, the practice has been sold to a commercial company Optum (they’re purchasing practices like crazy here) Their doctor has left for a practice that doesn’t appear to accept MA plans…and now their issues are no longer niggling.
Timely appointments are difficult to come by and invariably with a PA (not necessarily a problem…unless the patient thinks it is) and they’re getting more and more dissatisfied…disgruntled is a more accurate description. All manner of criticism of “the System” and doctors and whatnot but the one thing missing appeared to be that their choice of a MA plan has played no small part in their poor quality of service.
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The patients pay nominally 20%. Congress in its desire to buy votes will not let Medicare premiums rise more than the Social Security payment percentage wise in any year. So some years the portion paid by patients dips below 20%. The 80% number is not “government”. Rather it is funds from the Federal Medicare taxes. I believe the Medicare taxes are paid by both employee and employer.
This thread is about the Advantage vs traditional medicare. The Advantage plans get a large subsidy from the traditional medicare tax pot. It started out in the early 2000s to kick start the plans at $600 per year per Medicare Advantage enrollee. I don’t know the current subsidy, but I am certain it is over $1,000 a year. The last time there was a plan to do away with this transfer the Advantage people claimed one political party was cutting Medicare by billions and billions every year. Technically this is correct - Medicare C (aka Advantage Plans) were would have their subsidy reduced over a 10 year period.
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You seem to be talking just premiums here. The actual costs of medical care are also shared, with the patient paying co-pays and/or 20% of covered costs, and all non-covered costs.
Actually, it is the government. There are 2 trust funds held by the US Treasury that pay Medicare costs. The trust funds are administered by CMS (Centers for Medicare & Medicaid Services), which is a federal agency that is part of DHS. And there is more than just Medicare taxes that fund the trust funds.
The Hospital Insurance Trust Fund (HI) is funded by payroll and self-employment taxes, interest earned on the trust fund, income taxes on Social Security benefits, and premiums from people who aren’t eligible for premium-free Part A.
The Supplementary Medical Insurance Trust Fund (SMI) is funded through funds authorized by Congress, Part B and Part D premiums paid by beneficiaries and interest earned on the trust fund.
You can read more details, including what each trust fund pays for, at How is Medicare funded? | Medicare
AJ
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There needs to be some clarification to this thread. The OP mentioned Medicare vs Advantage but what they likely really mean is Medicare Supplement (i.e. Medigap) vs Advantage. Everyone (minus a very select few) gets access to Medicare and then has the choice of either a Supplement Plan or an Advantage Plan.
As as far as Medicare (or a Medicare Supplement) ever denying coverage? Pssha!?!?
We found 1.40% of services were denied and 0.68% of total spending was denied, with rates rising over time. Traditional Medicare’s coverage rules accounted for 85% of denied services and 64% of denied spending; remaining denials were due to additional Medicare Advantage insurer rules.
Bottom line, basic Medicare, Medigap, and Medicare Advantage can all deny a claim.
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Thanks Hawkwin, and all!
as the OP, I really was asking about Original v. Advantage. As this thread shows, it’s all a really messy subject and I really don’t know how most people arrive at accurate information. I am not sure that I want or need a Medigap at this point, and looking at summaries, Wendy took G but G does not seem to be available in Massachusetts…in fact there is a ton of variation from state to state.
Regarding denials, I have personal experience with this. I was called to Texas where my mom fell, broke her hip and was at death’s door for some time. Turns out that there are two contract care organizations between her and her health providers. They said “no” to paying for diabetic testing while in the hospital (she’s diabetic) and yes to five days of physical therapy (for a broken hip at 85 years old). Calls were made on her behalf and everything has since worked out fine, but she never would have nor could have made a phone call on her own. She also does not understand that there are two organizations that are not The Government skimming off the top. She is a wise and intelligent woman, but this is all just too much for an 85 year old. It’s darned near too much for a 65 year old, who is frankly, still struggling up the learning curve; i.e. I pay 20% after the deductible is met but I have yet to see an actual amount for a deductible. I’m not even sure yet what it all means. I can see the appeal of letting an Advantage Plan manage all of that (and the negative aspects, so often referred to in this thread).
Thank you all again for such valuable insights.
-Randy
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G should be available in all states; though MA has some special rules since they first rolled out their state-based healthcare plan. While your healthcare decisions are your choice, I would strongly advise either a Medigap (Supplement) plan or an Advantage Plan.
A lot of the confusion stems from the fact that Both Medicare and Medigap use letters for the plan formulas. Medicare A (what we all get) and Medigap A are two different things.
https://www.mass.gov/doc/2023-medicare-supplement-product-listing-effective-112023/download
https://www.medicare.gov/medigap-supplemental-insurance-plans/#/m/?year=2023&lang=en
Note, you don’t need to go with a more robust plan (F and G primarily) that has a higher expense. You can go with Advantage or one with less benefits (usually Medigap A and B) and still avoid getting slammed by the portion not covered by basic Medicare.
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Something I was told was that the annual premiums for Plan F will rise more rapidly than for Plan G - due to the fact that the pool of new users funding it will decrease because eligibility is restricted to those who turn 65 before 2020. The pool will shrink as people die off. Plan G premiums will continue to be funded by people as they turn 65.
I was also told that switching from one plan to another requires underwriting to establish your rate essentially adding a pre-existing conditions determination. Only your initial enrollment qualifies for guaranteed acceptance.
The above applies to Medigap plans only.
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Potentially valid - but it would depend on whether or not the insurance companies use separate pools for each group instead of pooling people by their coverage. Keep in mind that G is essentially F without Part B deductible. Not sure an insurance company needs to segregate and rate people on that little difference, just bill them differently. For example, there is no reason why Plan F hospice should be any more expensive than Plan G hospice so might as well group them together.
Absolutely correct. You generally never want to have to change your plan, which is why this decision is so important - you may never qualify to ever make it again.
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This is a bit misleading. Medicare Advantage isn’t an alternative to a supplemental plan/Medigap but rather the whole of traditional Medicare A, B and D with or without the supplemental. Technically replacing the lot in one fell swoop…but manifestly not with something separate but equal. Or even better, which is the illusion the insurance companies try to create.
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Please do yourself a favor and read, " Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs," which you can get from the library. Then discuss it with your local SHIBA volunteer (if they are in your neighborhood). The effort was really worthwhile for me.
Wendy
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They ask regarding Medicate Advantage vs. Medicare Supplement, “Which is right for you?”
The obvious answer is neither.
-IGU-
Well, the obvious answer is…it’s the wrong question. It should be Medicare Advantage vs tradition Medicare plus Medicare Supplement. The MA plans aren’t interchangeable with a supplemental plan…so that you keep your Medicare A and B and get a cheap MA plan to pick up any out of pocket expenses. That’s what a confused person (and sorting this out can be very confusing) might infer from this title
There’s a massive difference in the skim rate between Medicare Advantage and a Medicare Supplement - High Deductible Plan G plus a Part D drug plan.
I went over this in my October 2020 article on the REHP.
And the October 2022 follow-up.
It’s no coincidence that corrupt AF Sen. Joe Manchin would be " LEADING 63 BIPARTISAN SENATORS IN URGING SUPPORT FOR MEDICARE ADVANTAGE PROGRAM
If I chose Medicare Advantage, the insurance industry would be skimming about about $2,000/yr. from me and I’d constantly be on the phone getting “prior authorization” for this lab test or this specialist. With regular Medicare, stuff gets done without the intrusion of a $30 million/yr health insurance CEO.
I pay $44/month for a High Deductible Medigap Plan G ($524/year), the State Insurance Commissioner tells me the medical loss ratio for the insurer is about 80%, so the skim rate is 20% or $105 annually. I also asked the Insurance Commissioner which Medicare Supplement insurer had the most customer complaints and they told me they get almost no complaints on Medigap Plans because the for-profit insurer is prohibited from making any coverage decisions (i.e., they just pay what Medicare tells them to pay.) The only complaints they get is when someone cancels a policy and the insurer keeps debting the monthly premium from customers credit card or checking account.)
I also pay $1.60/month for a Medicare Part D drug plan from Aetna ($19.20/year). Medicare requires that the insurer spend at least 85% of the premiums collected on actual drugs, so the most Aetna can skim from me is 15% or $3/year. Of course, there’s no limit on what Aetna can charge you for a drug, so it makes sense to check prices with GoodRx before you let your health insurer fleece you. I filled a prescription last week for the most expensive generic drug I take. If I used my drug plan, Aetna would have charged me $260 for a 90-day supply. Instead I had my doctor write a prescription for a 365-day supply and GoodRx gave me a coupon for $353 vs. $1,040 for the same number of pills from Aetna. Better to have that $700 difference in my pocket than lost to excessive Executive Compensation with Aetna.
So the for profit insurance industry is skimming $108/year from me and $2,000/year from the average Medicare Advantage (MA) customer, plus they’re making the MA customer jump through all kinds of hoops when they need medical care. Do the arithmetic.
intercst
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I’m calling Shenanigans.
69% of all Advantage plans have NO premium. Only 4% of plans cost even $100 a month or more, and you would have us believe that the cheapest option for you in your state would cost $2000 a year?
cough Innumeracy. cough
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No. When you’re looking at health insurance, you need to pay attention to the “actuarial value” of the plan. The actuarial value of the average Medicare benefit in 2021 was $13,500. If you choose Medicare Advantage, that $13,500 is transferred to the for-profit insurer you choose and they’re only required to spend 85% of that $13,500 on actual medical care for you. The other 15% (i.e., $2,025) goes to the Medicare Advantage broker (up to a $700 commission the first year and half that in subsequent years if the “mark” stays with the MA policy, the for-profit bureaucracy the insurer uses to delay and frustrate your access to health care, and an ungodly level of excessive Executive Compensation (tens of millions of dollars/year) in the top 5 largest MA insurers. The Gov’t bureaucrat that runs CMS (and covers more than 60 million people) earns less than $200,000/year. Traditional Medicare also spends about 98.5% of it’s program costs on actual doctor visits, hospital bills and prescription drugs and only 1.5% on admin costs.
There’s no free lunch in finance. If you’re losing an additional 13.5% to skim, you’re getting less health care. They’re just giving you a few freebies up front, then crucifying you if you get sick when it’s too late to switch out of the program.
It’s no different than an S&P 500 index fund with a 0.15% expense ratio and one with a 1.35% expense ratio. Which fund do you think would deliver a better return to you?
intercst
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