By Thomas Lane and Lin Brown, M.D.
New Hampshire Bulletin, Oct. 25, 2024
This fall, countless New Hampshire seniors will be reexamining their Medicare coverage options for 2025 during the open enrollment period, which runs from Oct. 15 to Dec. 7. One of us, Thomas Lane, is far from Medicare eligibility age, but as a health economist, he is frequently asked by friends and family about what plan they should choose. After all, health insurance is complicated, and it’s very hard to find unbiased advice.
Usually, Thomas responds to the question with a question of his own: What kind of a plan are you considering?
Often, the response is some sort of a Medicare Advantage plan, and every time, he is shocked at how little folks know about the risks associated with signing up for that program instead of Original Medicare. Seniors should know that while Medicare Advantage may sound enticing in the advertising that blankets the airwaves each fall, it’s better known as “Medicare Disadvantage” because it can expose you and your family to big risks.
Dr. Lin Brown is both a physician and a Medicare beneficiary. As a physician, she considered herself knowledgeable and modestly intelligent, which she assumed would allow her to make a wise choice for her first Medicare plan. The initial allure of Medicare Advantage sucked even her in. The ads promised lower rates and more services! Who could resist? She is also healthy, minimizing the risk she would need complicated care. However, she soon realized she had made a mistake.
First of all, what is Medicare Advantage? Its formal name is Medicare Part C, and it serves as a single-package replacement for Medicare parts A (hospital care); B (physician services); and D (prescription drugs). However, it’s deceptively named because it isn’t real Medicare.
Original Medicare (Parts A and B) is operated by the federal government, while Part C is essentially just heavily subsidized private insurance that companies are allowed to label Medicare. Part D is operated by private companies. Insurers often try to make Medicare Advantage plans seem like a sweet deal through lower premiums and extra benefits like hearing and dental not covered under Original Medicare, but as the saying goes, putting lipstick on a pig doesn’t change the fact that it’s still a pig.
Under Original Medicare, there is little question about what care will be covered, a fact doctors like Dr. Brown appreciate because it means less paperwork for them and more time to provide actual care. But because Medicare Advantage isn’t real Medicare, private insurers can play all sorts of games to boost their profits by delaying or denying care. Often, this is through what is called a prior authorization, or extra paperwork for your doctor, forcing them to extensively justify why you need the care they seek to give you.
For Dr. Brown, this meant that in her practice, prior authorizations were the rule, not the exception. They wasted valuable physician practice time and delayed care. For you as a patient, this means that should a major issue or even an emergency arise, your insurer may turn around and surprise you by claiming the care your doctor says you need isn’t “medically necessary” and refuse to pay for it. Dr. Brown and her physician colleagues do not appreciate that there are two types of Medicare, especially given one of them works so well and the other does not.
Medicare Advantage denials are becoming increasingly common. Just between 2022 and 2023, denials skyrocketed by 55.7 percent. They also tend to be quite arbitrary; the reviewer, who has never met the patient, may not even read the patient’s records but deny care anyway. Increasingly, denials aren’t even done by real people, let alone clinicians, and are being taken over by poorly designed AI algorithms that are notoriously erroneous; 82 percent of denials that are appealed are overturned, showcasing the poor quality decision-making that goes into them. But just 11 percent of denials get appealed because many patients aren’t aware they can appeal or don’t want to undergo the burdensome process.
Delays and denials are more than just inconvenient. They can worsen illness and even kill. But, they are a great way for insurers to boost their profits. Obviously, we all hope to never have a health emergency, but should one occur, Medicare Advantage may well stand in the way of you getting the care you need.
Dr. Brown herself experienced a related issue when she was a Medicare Advantage beneficiary. She was disappointed when her plan really did not cover anything related to her hearing aids, since the care was “out of network.” And it covered nothing on a crown from her dentist, also “out of network.” In order to maximize their profits, Medicare Advantage plans tend to have limited and unclear provider networks that allow them to dodge responsibility for patient health needs. Original Medicare, in contrast, covers almost all providers.
Medicare Advantage is so heavily advertised because private insurers make lots of money on the program. Unfortunately, they often do so by gaming the system, siphoning off our tax dollars by exaggerating the health needs of covered patients to the tune of $88 billion to $140 billion annually. Dr. Brown experienced this too, with her Medicare Advantage plan insisting that she and her husband receive a nurse visit. This was likely so that her plan could add diagnoses to their health records, which enable them to receive higher government subsidies.
Most private health insurers in the program have been accused of fraud and are starting to face some accountability in the form of lawsuits and investigations to recoup overpayments, but there is little chance that all of the lost money will ever be recovered. Private insurers have been fighting accountability for years, exemplified by recently released court records that show how they pressured the Obama administration into killing proposed regulations in 2014 that sought to reduce overbilling. Unsurprisingly, these efforts continue to this day.
As a young person, this is what makes Thomas especially upset. He’s happy to pay his taxes and contribute to the care of all the incredible seniors in his life, but watching that money disappear into the Medicare Advantage money-incinerating bonfire for no good reason is depressing, to say the least. It also endangers Medicare’s solvency and decreases the chance that it will be there for him when he eventually becomes eligible.
To make matters worse, New Hampshire seniors on Medicare Advantage are facing even bigger difficulties than their peers nationwide. Insurers are so upset over even the limited scrutiny and declines in their profits that they have begun to face that some of them are now pulling back from a number of states, one of which is New Hampshire. Over a million seniors have been dumped by their Medicare Advantage plans as a result.
You’re likely asking yourself: This sounds awful, so how do I avoid this? The safest route to reliable health insurance coverage that will keep you protected in the face of whatever life may throw at you is Original Medicare. However, because the Original Medicare coverage package was designed all the way back in the 1960s when medical care was much simpler, you will likely need to bolster it with additional coverage, such as a Part D plan and/or Medigap policy. Supplemental plans are private insurance plans just like Medicare Advantage, but they are regulated through different mechanisms and entail somewhat less risk for patients.
Why is Original Medicare the safest option for all seniors and not just those who have significant medical needs?
Because Medicare Advantage premiums are generally cheaper than the alternatives, some wonder why not start on Medicare Advantage and then switch to traditional Medicare later on when health risks are higher. Theoretically, this may be possible for some. However, switching back to Original Medicare after starting out on Medicare Advantage is quite risky because supplemental policy insurers can take into account preexisting conditions, leaving you with much higher premiums or even a refusal to insure.
Dr. Brown experienced this, too. Due to a hiccup with her pension plan, she needed to rethink her Medicare enrollment and reached out to a Medicare navigator for help. He guided her to Original Medicare, but switching back was not easy. A lengthy health evaluation was required to determine her premium. She was lucky that she remained healthy and was able to make the switch.
Starting on Original Medicare plus supplemental insurance tends to cost a bit more per month in premiums than Medicare Advantage, but it is the only way to ensure you will have quality and affordable coverage later on in life when the risk of a significant health need is unavoidably greater. In the long run, it may even be cheaper, too. Do yourself a favor and stay away from Medicare Disadvantage.
Thomas Lane is a health economics, policy, and management master’s student at the Karolinska Institute in Stockholm, Sweden. He recently graduated with a bachelor’s in economics and public policy from Dartmouth College in Hanover, New Hampshire. There, he was a member of the steering committee of Granite State Physicians for a National Health Program.
Lin Brown, MD, FACR, MACP is a retired rheumatologist from Dartmouth Health. Over the years she has practiced as a rheumatologist, a section chief, a fellowship program director for training rheumatologists at DH, and the coordinator of the rheumatology course at Dartmouth Geisel School of Medicine. A member of Granite State Physicians for a National Health Program, she is now almost fully retired.