Posted by Bill Sandweg on 10 October 2022.

It is that time of the year again.  The Medicare Annual Enrollment period runs from mid-October to early December.  That means that the airwaves are full of celebrity spokespeople encouraging everyone who is Medicare eligible to “get all you deserve.”  By that they mean that you should enroll in a Medicare Advantage Plan and get “more” benefits than traditional Medicare provides.  It is true that most Medicare Advantage Plans offer benefits that Medicare does not and that they do not charge their members for those additional benefits.  How can they afford to do that?  The simple answer is that they rigorously control the benefits their members can use in a way traditional Medicare does not.  They may also require co-pays and other out-of-pocket expenditures.  The phrase, “There is no free lunch,” applies here.

Those companies that offer Medicare Advantage Plans are doing so, not out of the goodness of their corporate hearts, but to make money.  They accept Medicare eligible patients and receive money from Medicare for each of those patients.  At the end of the year, they get to keep the difference between what they received from Medicare and what they had to spend on their members’ care.  There is a great incentive to keep the amount they spend on member care to the lowest possible number.

Medicare Advantage Plans keep their expenditures down in a number of ways.  They may limit the doctors their members may see to a network of doctors with whom they have negotiated favorable prices.  If your doctor or your favorite hospital is not in their network, you cannot see your doctor or go to your hospital without incurring additional charges.

The plans may also require that before you go see a specialist, the visit be approved by your primary care physician.  Reducing specialist visits is a time-honored method for HMO’s and similar organizations to keep costs down.  You may think you need the opinion of a specialist but, if your primary care physician, who is paid by the plan, does not agree, you don’t get to go.

In recent news, a new plan tactic has been discovered.  Medicare permits its beneficiaries to have up to 100 days each year in a skilled nursing home or in a rehabilitation facility.  Medicare Advantage Plans must also give their members that same benefit.  However, they are allowed some leeway in deciding when it is no longer medically necessary for their member to remain in the facility.  Recent investigations have found that some plans are telling their members to go home when the professional staff at the facility believes that the patient needs more care and that it would be unsafe to discharge them to home.  The response of the Medicare Advantage Plan?  Go home or appeal our decision and run the risk of being on the hook for several thousand dollars, if you lose the appeal.  The appeal is made within the advantage plan and many believe that the appeal process is weighted in favor of the plan.

Investigators for the Inspector General of the Department of Health and Human Services, which administers Medicare, found that nursing home care was among the most frequently denied forms of care by advantage plans.  The investigators also found that traditional Medicare would often have covered the denied nursing home care.

Medicare Advantage Plans may be right for you but they are not right for everyone.  Before you give up the freedom of traditional Medicare for an advantage plan, see what is covered and what is not.  Are your doctor and your favorite hospital in the plan’s network?  What are the services you are likely to need in the coming year and how much will it cost to receive those services through the plan?  How will your overall expenses under the plan compare to your expenses with traditional Medicare?  Are you willing to live with restrictions on your ability to see specialists without prior permission? There is lots to think about before making the choice to leave traditional Medicare.  Whatever you do, don’t allow yourself to be swayed by celebrity endorsers.  Do your research before you make your decision.  If you find yourself in a plan you don’t like, you will be stuck there until the next Medicare enrollment period rolls around.