Why Is There a Big Push to Buy Medicare Advantage?
Medicare Advantage (MA) has gained a ton of steam in recent years, and many of us are noticing some serious promotion coming from the federal government.
According to the 2020 Medicare Trustees Report, 37.5% of Medicare beneficiaries choose Medicare Advantage. The Board of Trustees expects 43.2% to choose Medicare Advantage by 2029.
Odds are you’ve seen some commercials for Medicare Advantage during the Annual Enrollment Period (AEP), which lasts from October 15-December 7.
We’re talking about those ads that focus on extra benefits like dental and vision benefits, free gym memberships, and credits for over-the-counter medications. You’ve probably also seen a focus on $0 premium Medicare plans and even plans that promise to pay your Medicare Part B premium.
It’s not just on TV either – before you turn 65 and every year during the AEP, your mailbox is probably packed full of MA advertisements.
It’s everywhere! So, why is there a big push to buy Medicare Advantage?
Medicare Advantage Is Private Healthcare
Original Medicare is healthcare provided by our federal government. Medicare Advantage is private healthcare offered by companies like BlueCross BlueShield, UnitedHealthcare, and AARP (just to name a few).
MA plans are able to offer extra benefits and even $0 premium plans because the federal government subsidizes it.
Shifting the Risk from CMS to Private Insurance Companies
Original Medicare has figured out that healthcare for a person over 65 costs them a certain dollar amount. They figure if they pay a private insurance company a little less, they’re saving money.
Michael Rainey, a commentator for The Fiscal Times, explains the private insurers are responsible for managing their plans to ensure a profit.
So, Medicare pays a monthly premium to that private insurance company on your behalf. That private insurance company then offers Medicare Advantage plans you can enroll in instead of Original Medicare.
CMS, the Centers for Medicare & Medicaid Services, believes they are saving money by getting you off of Original Medicare and moving you over to a Medicare Advantage plan.
That helps explain why CMS has been accused of pushing and promoting Medicare Advantage plans instead of Original Medicare.
Medicare Advantage Is Managed Care
We know that CMS pays private insurance companies a monthly fee for each individual they insure. That’s how these private companies can offer extra benefits and even $0 premium in many cases.
However, another way MA plans can offer more benefits for $0 premium is because it’s managed care. With MA plans, you’ll often see procedures or treatments being declined in favor of less-expensive treatment alternatives.
Dr. Jacob D. Sams, MD, a board-certified orthopedic surgeon at Decatur Orthopedic Center (DOC) explains that Medicare Advantage plans often require a pre-approval process that’s difficult and time-consuming.
Dr. Sams has also had MA plans change his treatment plans – even if it’s not in line with his recommendations.
For example, one of his patients was ready for a hip replacement. That patient’s Advantage plan denied the surgery and instead suggested several more weeks of therapy.
PBS explains that the federal government’s preference for MA plans started during the Obama Administration, and according to Philip Moeller, PBS contributor, it was “driven by the desire to limit health-care expenses and improve the health of Medicare enrollees at the same time.”
Managed care seemed like the best way to meet those money-saving goals. MA plans were the obvious way to do it because they had the necessary management tools in place.
CMS Is Pushing Medicare Advantage Plans
CMS, the governing body over Medicare, has been biased on many occasions towards Medicare Advantage plans.
From the Medicare & You Handbook, which is distributed to all seniors, to their website making overly broad suggestions about Medicare Advantage, you need to be on the lookout!
The 2018/2019 Medicare & You Handbook Draft Scandal
The Center for Medicare Advocacy explained in a 2018 statement about the 2019 handbook draft: “[I]nformation about traditional Medicare and Medicare Advantage (MA) distorts and mischaracterizes facts in serious ways.”
For example, the 2019 handbook draft suggested that Medicare Advantage is the less expensive alternative for beneficiaries. (Not always true!)
It also failed to highlight the clear difference between Medicare and Medicare Advantage, which is the networks! Medicare gives you access to any provider that accepts Medicare assignment.
Medicare Advantage limits your access to a network of providers in a specific area. This is critical information, especially for those who travel often or go south for the winter.
Finally, the handbook made prior authorization requirements seem like a benefit when in reality, they’re a hurdle you have to go through to get coverage. And that’s not a hurdle you have to go through with Original Medicare.
While the draft has since been revised, it’s important to have this context. CMS has urged seniors to choose Medicare Advantage in the past, and we should be on the lookout for this kind of behavior now and in the future.
The Medicare Website Encourages Medicare Advantage
The Medicare Rights Center and the Center for Medicare Advocacy have explained that many of the tools available on Medicare’s website encourage Medicare Advantage enrollment over traditional Medicare.
Medicare’s website provides “overly-broad suggestions to enroll in MA when more nuance is required” (Medicare Rights Center). The Medicare website fails to present individuals with a complete look at their Medicare coverage options.
The Medicare Plan Finder tool is a prime example of the push towards MA plans.
Many MA plans have $0 premium, while Medicare Supplements routinely cost $100-$125 per month in premium.
The Plan Finder tool is hyper-focused on premium, and there are a lot of non-monetary components that the Plan Finder fails to highlight.
Philip Moeller, PBS contributor, explains, “Even when I knew a specific plan was offering new non-medical benefits, they often weren’t included in Plan Finder or not clearly explained (PBS).”
Medicare Email Campaigns Favor Medicare Advantage
Medicare email campaigns have also been criticized by advocacy groups for drawing more attention to MA plans. Past email subject lines include:
- Could Medicare Advantage be right for you?
- Get more benefits for your money
Messaging in the emails included phrases like “check out Medicare Advantage.”
A report from Reuters includes commentary from Joe Baker, president of the Medicare Rights Center.
He explains, “People have two options, and CMS should be communicating about the advantages and disadvantages of both - this approach is lopsided.”
In conclusion, CMS has been pushing Medicare Advantage enrollment. We believe CMS is promoting MA so heavily because it puts the risk on insurance carriers, not the federal government.
CMS demonstrates this big Medicare Advantage push on its unclear Plan Finder tool, past drafts of the Medicare & You Handbook, and AEP email campaigns.
While Medicare Advantage certainly has its benefits, such as lower premiums, extra benefits, and all-in-one coverage, it does have its downfalls, such as limited networks and difficult prior authorization requirements.
There’s a big push for Medicare Advantage in our country, and we think you should be aware of it.
Medicare Advantage may be right for you, but make sure you know and understand all of your options before falling for the heavy advertising campaigns.
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