Should I Drop My Medicare Advantage Plan?
The complexity of this decision threatens to be overwhelming. Simplicity is not compatible with healthcare profits.
Photo by Simone Secci on Unsplash
Deciding how to manage your health insurance as an older person involves hacking through a bramblebush of regulations, insurance company policies, state and federal laws, and your own uncertain estimates of what kind of care you will need. Aaargh!
Rather than try to repeat information that you can find elsewhere and that is often expressed in unintelligible legalese, I’m going to describe my own journey that is still going on. My experience might not mirror yours, but it will reveal the all-too-cumbersome process that all older folks face.
Before Things Got Complicated
When I retired from college teaching, my health insurance was not an issue. The college where I worked for 28 years provided good benefits for retirees. Since I was eligible for Medicare, the college offered a Medicare Advantage (MA) plan that covered both me and my spouse. The college paid about two-thirds of the premium, leaving me with an out-of-pocket premium of around $100. That was all I needed to know since I had no serious health problems.
After about five years, the college rescinded spousal coverage. That caused some financial hiccups for us as a couple, but my coverage remained the same.
As the years went by, the cost of premiums and my share of that cost began to rise. What else could be expected? The coverage was adequate for my needs. Smooth sailing. But rougher seas approached quickly.
Overwhelming Wave of Information
Last year (2024), the college sent a letter to all retirees explaining that, for budgetary reasons, partially supported enrollment in our MA plan would cease as of December 31. They added that we could continue with our current plan in states where it was available, provided that we pay the full premium, or we could switch to another plan of our choosing.
Since my state (North Carolina) did not offer the current plan, I was suddenly cast into the rough waters of the health insurance marketplace. I quickly learned that environment is hostile. Further, I had about six weeks to make a decision.
I downloaded the online database of all MA plans offered in my area of the state. It was a long list, arranged by carrier, monthly cost, and a few other features. The only way to find out what each plan covered was to contact individual companies, especially since companies do not routinely supply such information online.
After briefly investigating what switching to original Medicare would entail (to be discussed in a subsequent post), I decided to focus on applying for the MA plan that would provide the coverage that I needed for a cost that I could afford. This analysis consumed several hours a day for about three weeks. To understand how I made my decision, you need to understand how MA plans typically work.
Medicare Advantage Plan Features
While details (where the devil resides) vary greatly, MA plans typically offer the following advantages:
Lower to no monthly premiums compared to original Medicare – MA plans achieve this by generating revenue from contract arrangements for Medicare reimbursements for estimated costs of coverage for enrolled patients.
Public Policy Note: MA plans are notorious for perpetrating massive fraud against Medicare and Medicaid. They have been proven to have submitted claims for reimbursement for senior citizens who aren’t sick or for fraudulently elevating legitimate claims to more severe levels of illness than patients actually experience. Such fraud amounts to billions of dollars but is generally not investigated by the current regime.
Supplemental coverage for vision, hearing, and dental that is not provided by original Medicare – Such coverage is an important incentive for seniors, like me, who need it.
Automatic prescription drug coverage – This kind of coverage under original Medicare requires purchasing additional insurance for a monthly premium. Without such coverage, prescription drugs can easily bankrupt you.
Lower out-of-pocket costs for routine medical needs – Such costs exceed what original Medicare charges, but are lower than what physicians, clinics, or hospitals would charge without insurance coverage.
I finally chose an MA plan offered by the company with whom I had coverage in the past. This simplified the application process, and they provided somewhat better coverage for a monthly premium of $0. I was elated at my good fortune.
My Experience with MA This Year
My initial elation has gradually descended into buyer’s remorse. Although I was spared the expense of a monthly premium (though Medicare continues to deduct the Plan B premium from my Social Security payment), I began to encounter details in service that were inconvenient. Here are a few issues from the past five months.
The first hiccup occurred when I learned that my current primary care physician (PCP) was out-of-network. That meant that I would be charged a co-pay for every medical visit, in-person or online. Further, special services that my PCP provided would be reimbursed to him by my MA carrier at a lower rate.
When I searched for a new, in-network PCP, all the physicians recommended by the carrier in my area were not accepting new patients or were members of a consortium that could assign a different physician for each visit or encounter. Unacceptable.
A second problem arose when I applied for reimbursement for new eyeglasses when my lens prescription changed. When I searched online, I learned that I could be reimbursed for up to $115 for new eyewear – far below the price of $395 that I had to pay for progressive lenses. Better than nothing, but still…
A third issue emerged early this year when I was diagnosed with a condition that might require laparoscopic surgery. Of course, I needed to select an in-network surgeon to keep my share of the expense low. But finding such a clinician has proved difficult, especially with the MA carrier providing minimal online or in-person assistance.
Moreover, I need to make an appointment with an in-network surgeon just to get an estimate of cost. And who will pay for that consultation? Unclear. Even with that estimate in hand, I still need to make sure that other clinical providers on the team are in-network to avoid surprise billing for out-of-network services. Another round of questions and consultations. The whole thing involves juggling so many balls at once that I’ve decided to postpone the surgery indefinitely.
A fourth problem presented itself when my hearing aids (purchased out-of-pocket three years ago) needed replacement. According to the benefits listed online, my MA carrier would pay up to $2,500 for hearing aids. But the catch is that they require me to use their vendor about whom I know nothing. When I contacted the vendor, I could not get a ballpark price on their products without undergoing a complete audiology exam. I already have a vendor who provides wonderful service and a high-quality product. I’m now trying to get the insurance provider to agree.
Disadvantages of MA insurance
My experience so far leads me to the following conclusions:
The supplemental coverage for vision, hearing, and dental – while welcome – comes with several unexpected limitations. Customer service assistance is spotty and generally not thorough.
The in-network limitations are very intrusive and hard to navigate. Available in-network providers who accept new patients are extremely difficult to find.
While I haven’t mentioned it, the list of prescription drugs (known as a formulary) might not include medications that you need or at the lowest prices.
Expensive medical procedures might require prior authorization that is too frequently withheld. Media stories are filled with tragic examples.
The list of in-network clinical providers can change instantly without warning. For example, your PCP could suddenly decide to withdraw from your insurer’s network at any time, leaving you at a major disadvantage. The same holds true for the formulary of prescription drugs.
Most of these problems stem from the private health insurance business model. That model entails maximizing revenue (from premiums, government subsidies, and contracts with vendors and clinical providers) while limiting the provision of clinical services. It’s the only way that insurers can make a profit.
So what’s my decision? Right now, I’m uncertain. I have until November-December this year to decide. Please feel free to weigh in with your thoughts, especially about your experiences.
I conduct research for these posts so you don’t have to.
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William: The health insurance racket has just about ruined medicine. When I turned 65, on advice of an “agent” that I trusted, I went straight Medicare and purchased a Supplement policy, which turned out to be a wise choice. The upside is that most - but not all-providers “accept” Medicare. In doing so, providers agree to accept less than the “going rate” for services in return for “guaranteed” timely payment. Medicare pays 80% of the agreed upon “charge,” and the Supplement pays the remaining 20%. This has worked well for my wife and me, enabling us to avoid huge unexpected medical expense, which we would have had, inasmuch as my wife has experienced a number of conditions requiring hugely expensive treatment and aftercare. Of course, the premium for our Medicare Supplement has doubled in the ensuing 15 years, now approaching $1,000/month, and you can forget “shopping” for lower Supplement premiums with any “preexisting conditions.” We have always maintained separate Part D (drug) coverage and change plans nearly every year. Medicare.gov provides a comparison tool (based generally on out-of-pocket expense for the specific drugs one requires) for all “approved” plans that, so far, has proved reliable and valuable. The whole matrix is a variation on the Good/Fast/Cheap Paradox (you can only have two). Our method is not cheap - our out-of-pocket health insurance expense, excluding Medicare premiums deducted from Social Security benefits is at least $11K/yr at age 80. BUT we are also $800K to the good in terms of value received, which is, after all, why one buys “insurance.” So there’s that. On the down side, Medicare imposes all kinds of regulation on providers in terms of what treatments they can render in what circumstances, with what frequency and in what order, which, in my opinion, has greatly reduced the overall “quality” of medical care. Avoiding the Advantage type plans sacrifices a lot of illusory bells and whistles (eye care, dental care, hearing aids,,etc), but, as a Veteran, I (rather late in the game) discovered that I was eligible for generous benefits in the form of dental insurance at low cost/high benefits and top of line hearing aids for FREE. Hope this adds to your data bank.
This is precisely why I decided to become a Medicare agent (CA only, at the moment). It’s very complicated and can be time consuming. Someone like me can do the heavy lifting. MA plans can be the best choice for some people. To say that you should never have bought one, full stop, is a bit naive. There aren’t a whole lot of options and not supplementing Medicare at all is a HUGE gamble. Everyone, please find an agent licensed in your state to help you. It should cost you nothing to get help.