Medicare versus Medicare Advantage

medicare-advantage1.jpgWhile this is a topic I tried to keep below my radar for years, it has become an issue to be dealt with and elucidate for others!  Long ago my late husband, an internist, would rant about all the headaches caused by Medicare Advantage (MA) and similar ‘insurance’ plans.  They interfered in the doctor patient relationship, delaying needed care while creating headaches for his office billing staff.  I took note, but didn’t understand the full picture until Medicare became my insurer.  Thanks to an honest insurance broker who reminded me of my late husband’s hatred for the MA plans, I was happy to get a supplement to Medicare which even covers me when traveling abroad.  While I understand the ‘scene’ better, I can say I do not fully understand this ‘market’ as it is utterly complex and the rules keep changing on both sides of the ‘game.’

Do you know of any advertiser on TV (other than PSA’s) that seeks your use of their product because it is purely good for you?  No!  Medicare Advantage plans ‘Plan C’ have become a huge portion of the TV advertising arena and they now escape enrollment date boundaries that were in place only a few years ago (rules change).   

Just how profitable are you to the insurance industry to warrant so many advertising dollars to get your business?

Did you ever wonder where insurers are making their profits?  It’s not quite directly from your pockets!  They entice your business and dollars by giving you ‘freebies’ like an OTC pharmacy allowance, gym memberships, free dental and vision care, etc.  It all seems just ‘peachy keen.’  But, Medicare itself along with MA denials and delays of care are paying for your perks while making huge profits for the insurance industry!  Medicare or the US government should not be paying into the profitable margins of the insurance industry.  We should be the beneficiaries of those funds.  The denials and delays of care will cost you more than dollars. 

Gail Koziara Boudreaux,
CEO Anthem, Inc. She and other Health Insurance CEO's need their $10's of Millions in annual salaries.
If your MA plan won’t let you see a certain specialist, say for specialty cancer care, you may be unable to get back into regular Medicare for the care you need.  Looking for a better plan is not what you want to do when dealing with a serious and time sensitive need for care.1   MA patients tend to ‘develop’ more additional health issues thanks to ‘chart reviews’ done by the insurer than those on traditional Medicare where no one is looking for extra dollars.  MA insurers make more money on those increasing health issues as ‘risks’ to their patient population.  Interestingly, the same problems don’t seem to occur as much in the Medicare population.  MA plans already make about $200 per month per enrollee and that number has increased significantly in the last few years.2  “During the first three months of this year, Anthem took in $37.9 billion in total revenues, but only 27% of it came from private-paying individuals and employers that offered coverage to their workers. That’s a huge swing from the same three months in 2012 when 56% of the company’s revenues came from private-paying customers.” 3


Looking at rural patients in particular, they disenroll (when they can) from their MA plans at a rate almost 10 times higher than they enroll in them.  Clearly, they are not getting benefits from their Advantage plans and many others, especially those with worsening health have similar experiences.

We got the message that his procedure couldn’t be done as planned since his ‘insurance’ wouldn’t let him use the surgery center where it had been scheduled.

My own family experience with MA plans has been enlightening and helped us help others avoid the same pitfalls.  My partner, a healthy and young looking senior, encountered a United Healthcare rep signing folks up for United’s MA plan in the grocery store.  He was already a United customer through AARP and was happy with that.  (I doubt anyone on a motorized scooter with their oxygen in tow would have been approached.  They are not the best for MA plans financial bottom line.)  “But this is FREE!  I don’t have health problems, so I am not so worried about my insurance.”  My objections fell on deaf ears.  It wasn’t long before he had expected need for routine screening and soon some health issues came along.  A simple screening colonoscopy scheduled as before seemed to be going smoothly.  Then, the Friday before Easter with the procedure planned for the Monday following, I received a call afterhours that I missed.  In addition to their calling the wrong phone, trying to get back to the caller was not easy at that time.  We got the message that his procedure couldn’t be done as planned since his ‘insurance’ wouldn’t let him use the surgery center where it had been scheduled.  Rescheduling took 3 months and moved the colonoscopy to the hospital. Hospitals accept lower payment for the use of the facility so they are often used by MA plans to lower their financial exposure, while making the hospital’s margins even tighter.

We hear that Medicare will go bankrupt or is unsustainable usually by those who oppose Medicare For All or a single payer type healthcare system.  It has long been shown that our overall health improves about age 65 when we are able to take advantage of Medicare.

Medicare costs less than the MA plans to provide care that is at least as extensive and with the same or better outcomes as an MA plan.  With Medicare, you have choice of providers to a much greater extent than with Advantage plans.  Unfortunately, blame can be misplaced onto Medicare for healthcare system problems created by the insurers and their MA plans.  That works for the insurance industry because we then have negative thoughts when we hear people speak of Medicare For All (M4A) or Improved Medicare For All (IM4A.)  It is another subtle way to wrongly fault Medicare with problems in our private insurance and profit run healthcare system. 

Medicare Advantage is not the only ongoing threat to Medicare.  Since the late ‘90s, small steps have been allowed that in effect slowly privatize Medicare.  Trump era programs such as Direct Contracting Entities (DCEs) have also further privatized Medicare and now those have been virtually unchanged and renamed REACH in the Biden administration.2


Footnotes and Additional Resources: 

  1. Retiree with new serious health concerns.
  2. Profitability of MA plans, DCE’s and REACH
  3. Wendell Potter’s “The Potter Report”       
  4. A Webinar presented by PSARA (Puget Sound Advocates for Retirement Action) “Disadvantaged:  How Medicare Advantage Plans Fail Us & Would Sabotage Medicare for All.”

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