Buying healthcare insurance is NOT like buying a car. Unfortunately, in today’s monetized world, healthcare insurance has become all about the low, monthly payments, and not about what kind of care you need. It’s time to re-think where you want your healthcare dollar to go.
If you are 65 or older, once a year between October and December, you have the option of enrolling in a Medicare Insurance Plan. This is known as open enrollment period. It gives you the option of deciding where your healthcare dollar will go: to the people you want to see or to an insurance company that has predetermined who can treat you and what treatments you can get. This is known as “bundled care”, or more commonly, “Medicare Advantage”.
Just Because It is Cheaper Doesn’t Mean It Will Meet Your Needs
When asked, older adults consistently say that they value having a healthcare provider they know and trust. They also value having familiar services close at hand such as a local pharmacy, and hospital services, including emergency and imaging (e.g., X-rays, CT scans, MRIs). These very elements are covered under original Medicare (Parts A and B). By law, they must also be covered, at a minimum, by any Medicare Advantage Plan.
So, What’s the Difference?
To hear the insurance companies offering Medicare Advantage plans sell it, you get lots of bells and whistles: vision, hearing, dental and, maybe even a gym membership! While it is true that these services are not covered by traditional Medicare, you still have to pay for the Medicare Advantage Plan, whereas, you have ALREADY PAID FOR YOUR ORIGINAL MEDICARE BENEFITS! So basically, you are paying twice, but with significant limitations.
Medicare Disadvantages
Don’t get me wrong, if you are healthy and you don’t mind giving away your money, then by all means, feel free to send monthly payments to insurance giants like United Healthcare, Aetna, and Cigna. Their shareholders are grateful for your continued contributions to their dividends.
When signing up for a Medicare Advantage Plan, you are agreeing to keep your healthcare choices limited to providers who are contracted under that Plan, to having to get many procedures pre-authorized, and to utilizing only the hospitals and service providers already contracted with those insurance behemoths. If you use providers or services outside of the Plan, you will have to pay out of pocket.
Original Medicare: You Get What You’ve Paid for and Choose If You Want to Buy More
With original Medicare you get to choose the doctors you want to care for you, the hospitals you want to go to and be cared by, and preventative and screening services. These are covered in Part A and Part B. Medications (pharmaceuticals) are covered and paid for separately under Part D. And, because of payroll taxes, you’ve been paying for these benefits ever since you started working! So, while you may choose to buy a Medigap policy to cover some extras, you are already paid up!
As with any insurance policy, there are deductibles that have to be met before the coverage kicks in. Essentially, with original Medicare, hospital coverage costs $0.00. Outpatient costs $164.90 per month, and you have to pay $226 before Medicare begins to cover the rest. This is a pretty great deal, given all the expensive tests and equipment used! Your Part B premium is determined based on income limits, or thresholds, determined by the Centers for Medicare and Medicaid (CMS) and are updated and released annually.
Understanding the Fundamentals of Medicare
The fundamental question asked and answered by Medicare is who will pay how much to whom for what? This is also known as Fee-For-Service, and is adjusted each year for cost of living. FYI, as a Medicare provider, I saw my reimbursement go down over the last five years, even with the COLA.
The “how much” is determined by the Centers for Medicare and Medicaid (CMS) Physician Fee Schedule. The elements used to calculate what Medicare will pay a provider for treating you include overhead and maintenance costs, (e.g., supplies, rent, equipment, staff expenses), where services are provided (Zoom, office or hospital), and time and effort required for each physician service, including the necessary skill level as well as physical and mental effort. An additional factor used is the cost of malpractice insurance.
“To whom” is also determined by CMS and includes physicians, nurses, psychologists, social workers, physical therapists, occupational therapists, but more importantly, excludes certain providers and services (dentists, foot doctors, hearing aids manufactures, and eye glass makers). Which brings us to the “for what”.
Remember Dr. Welby?
When Robert Young treated folks every week on his show, he mostly offered practical advice, a kindly smile, gave a shot or two, and made sure that the hospital nurses took good care of you in recovery. His kind of medicine was MADE for Medicare.
But two important things have changed since those days. We are living longer (much longer), and what we use to diagnose and treat illness and injury has undergone a total transformation. The original fee for service structure was not flexible enough to anticipate the breakthroughs in genetics, imaging, biology, and pharmaceuticals, much less withstand the politics and lobbying from the insurance industry, pharma, and physicians.
Fast Forward to Today
Nowadays, however, medicine is a corporate crap shoot. Television ads tell you what to ask for when you see your healthcare provider. The same company that produces your life-saving medicine and has a patent on it, also owns the physician provider group that prescribes the medication that is paid for by the insurance company which is actually the corporate overseer of the whole thing. You may think you have choice, but your healthcare is determined by stock prices and compensation packages for CEOs.
Managed Care, Medicare Advantage, HMOs and PPOs.
In the last 27 years, healthcare has become big business. Insurance companies saw an opportunity to make money and with the Medicare Modernization Act of 2003 got the government to provide more funding to themselves. The plan offered to you by your kindly Medicare Advantage company works great as long as you don’t get sick or need to be hospitalized.
Here are 10 things to consider before you re-up with your MA plan:
- Limited Provider Networks: Many MA plans operate with restrictive provider networks, which means that you may have to switch doctors or healthcare providers if you enroll in that MA plan. This can be particularly challenging if you have longstanding relationships with your healthcare providers.
- Cherry-Picking Beneficiaries: MA plans have an incentive to enroll healthier beneficiaries because they receive payments from the Federal government based on the health status of who they enroll. This frequently results in “cherry-picking” healthier individuals, leaving those with more complex health needs in original Medicare.
- Risk of Plan Discontinuation: MA plans can choose to discontinue their offerings in specific geographic areas or discontinue their participation in Medicare altogether. This can disrupt your coverage leaving you high and dry and searching for new coverage.
- Variable Quality of Care: The quality of care in MA plans varies widely. While some plans provide excellent care and offer additional benefits not available in original Medicare, others may have lower-quality care, potentially leading to poorer health outcomes for you while they pocket the money.
- Complexity and Confusion: The multitude of plan options, benefit structures, and rules associated with MA can be confusing. Comparing different plans is challenging, and you may not have the bandwidth to investigate much less fully understand the details of your coverage.
- Potential for Higher Costs: While MA plans often offer lower premiums than Original Medicare, they can have higher out-of-pocket costs for specific services, such as hospital stays or specialty care. You may also incur additional costs if you seek care outside the plan’s network.
- Risk of Plan Changes: MA plans change their benefits, provider networks, and formularies annually. This means you may have to adapt to changes in your coverage each year, potentially disrupting your continuity of care.
- Lack of Access in Rural Areas: Many rural areas have limited MA plan options, making it difficult for folks in these regions to access their benefits. MA plans tend to be more prevalent in urban and suburban areas.
- Data Privacy Concerns: As MA plans collect and use your private healthcare data for care coordination and management, there are concerns about privacy protection and how and with whom that information is shared.
- Government Costs: In the long run, MA plans may prove more expensive for the federal government than traditional Medicare. The government pays MA plans a fixed amount per beneficiary, and if those payments exceed what it would cost to provide the same care through traditional Medicare, it will put strain the Medicare budget.
Medicare Open Enrollment Period October 15 – December 7
During the next few weeks, you will be receiving untold numbers of flyers, texts, be inundated with ads, and hear beautiful people tell you why you should enroll in a Medicare Advantage Plan. You will be told how much money you can save, all the extra benefits you can get (gym memberships) and watch beautiful people eat at fancy resorts and frolic on well-kept pickle ball courts. Don’t fall for it!
Think about who you want to place your trust in. Take stock of what your healthcare needs are now, and what your vulnerabilities and risks might be in the next year. Take a look at your monthly expenses, and see if you can afford to cover costs for medicines your healthcare provider prescribes but may not be on the formulary of your MA plan. Figure out who will water your plants, feed your pet, and make sure your bills are paid while you are in a hospital 40 miles away from your home or receiving post-acute care for surgery in a skilled nursing facility in the next county. Then decide to return to original Medicare.
3 responses to “Should You Buy Healthcare Insurance the Same Way as Buying a Car?”
I agree with your concerns about the Medicare Advantage Plans, but note that better care integration in systems like KP provides improves provider and system efficiencies which lower costs. All systems struggle with Medicare healthcare benefits focused an acute illness model and not a chronic disease model with progressive functional losses. Much of the latter are still a privately funded concern or drop to Medicaid when self funding runs out. I believe our health system would be of greater value if we were better at providing and funding the care that people need and desire. Our current system is too complicated for the consumer to navigate. Even though there are underfunding concerns re the single payor system, most advanced economies have found that system to provide much more care at a much lower net cost. For now, I continue to choose a Medi-gap policy which allows me to choose the kind of care that’s important to me. As a physician who knows the local market place, I suspect I’m a better consumer, which is not the case with most people.
Awkward topic
“Only in America” could our collective, hypnotized Belief In artificially created scarcity (AKA capitalism — the [only] actual American “religion”) permit what has happened here, to occur. For, three giant corporations now receive vast funds from us taxpayers (aka “Medicare”). Those True Oligarchs have acquired the right to make all the rules (directly and/or indirectly through their Paid Puppet Politicians) — doling out (as parsimoniously as possible) bits and scraps of “their” profits, thus framing health care as total (brutally two-class) Puritanism: the holy shareholders [The Elect] — that super-rich class who prosper with OUR money in fiscal heaven, with the rest of us TURNED INTO The Undeserving Poor, predestined for (or already IN) health “hell.”
Only in America could we turn life and death of the many into a profit center for the few. All of us, having been conned into viewing health care as “a business,” now are all well-trained to view trickle-down crumbs with gratitude, meekly accepting what we’ve been trained to view as normal, as our Fate. My friends in other actually democratic countries around the world observe all this with amazement: “How could Americans have become so docile and so dumb?” The only true “American Exceptionalism.”