Medicare Advantage (MA) has received mixed reviews after 25 years of implementation. While it may benefit employers, unions, and states with retiree obligations, it has raised concerns for seniors, doctors, and the government. Seniors may receive worse care under MA compared to traditional Medicare, doctors face cumbersome prior authorizations, and the federal government spends more on MA per capita than traditional Medicare. Additionally, several major insurance companies offering MA plans are involved in lawsuits.
Medicare Advantage began life as a brilliant idea: a public-private partnership to keep older people healthier and reduce costs.
At the time in 1992, both President George H.W. Bush and his challenger, Bill Clinton, supported it. An editorial in The New York Times declared, “The debate over health care reform is over. Managed competition has won.” What finally emerged in 1997 — Medicare Choice, now known as Medicare Advantage — was hailed as a win-win-win for patients, providers, and payers.
Twenty-five years later, a different consensus is clear: Medicare Advantage (MA) is a failure for seniors, who receive worse care than they do under traditional Medicare; for doctors, who must negotiate costly and dangerous prior authorizations for their patients; and for the federal government, which spends more per capita on MA than on traditional Medicare. Further, eight of the ten largest insurance companies offering Medicare Advantage plans are currently defendants in False Claims Act lawsuits brought by whistleblowers or the Department of Justice.
But it’s been a winner for employers, unions, and states that have pension and health care obligations to their retirees. They push hard to get people off traditional Medicare and onto MA plans. That’s because retiree benefits often include supplemental or Medigap policies that former employers pay for, while Medicare Advantage plans are almost entirely paid for by the federal government. Medicare Advantage plans are also winners for the private insurance companies that offer and administer them. Their gross margins are typically two to three times greater than other insurance plans.
DO NOT CHOOSE MEDICARE ADVANTAGE
Evidence of Coverage (EOC) | Medicare
What is it?
If you’re in a Medicare Plan, your plan will send you an “Evidence of Coverage” (EOC) each year, usually in the fall. The EOC gives you details about what the plan covers, how much you pay, and more.
When should I get it?
Who sends it?
What should I do if I get this notice?
- Review any changes to decide whether the plan will continue to meet your needs in the next year.
- If you don’t get this important document, contact your plan.
Benefits Provided by Medicare Advantage
Medicare Advantage, also known as Part C, is offered by private insurance companies. It was introduced in the 1980s to provide competition and choice. Seniors may find that these private plans offer convenience, a wider range of benefits, and lower out-of-pocket costs than Original Medicare. More than 3,100 Medicare Advantage plans are available nationwide as of 2020, with the average beneficiary being able to choose from 28 different plans.
- You are always responsible for copayments and coinsurances, and sometimes even for deductibles. Therefore, the cost could be quite high. There is an out-of-pocket limit – $8,300/year.
- Your choice of doctors/hospitals is limited by the provider network within a specific geographic area. Members are required to pay an increased cost, sometimes up to the full price, for services outside the provider network.
- Medicare providers may not always accept Medicare Advantage plans so your choices may be limited. Some doctors and hospitals do not participate in any Medicare Advantage plans and others only in a selected few.
- Many plans require referrals for specialists and other services.
- Medicare Advantage plans may change every year. Such changes may affect your premium, deductibles, copayments/coinsurances, and the scope of extra services.