By Saul Friedman
Family & Relationships
Newsday
March 24, 2007
Regular reader Martin Selig of Carle Place reminded me of a warning I had intended to convey about the problems with so-called Medicare Advantage plans.
The deadline for enrollment is March 31. He wondered whether an advertisement for one such plan – Liberty Advantage – isn’t intended to “lure people away from government controlled Medicare and put them in the hands of private HMOs.” The short answer, of course, is yes.
Beginning in 1997, the Congress pressured President Bill Clinton to further open Medicare to private plans, Medicare HMOs. Despite government subsidies, the HMOs abandoned the Medicare business and subscribers when they failed to make the profits they expected. But it was the opening wedge to Medicare privatization.
Then, under the Bush administrations, the HMOs got renewed life as “Medicare Plus” plans. With the passage of the privatized Part D drug plan, Republicans gave the insurance companies a huge “stabilization fund” to cushion them against possible losses and renamed the plans “Medicare Advantage.” And with the administration starving traditional Medicare, the Medicare Advantage plans are gaining subscribers because they seem to cost no more than Medicare but provide more coverage.
The Kaiser Family Foundation says there are 8.3 million subscribers to Medicare Advantage plans, up from 5.5 million since 2004. That’s because, in addition to the stabilization fund, they are further subsidized by the government, paid on average 12 percent more than the cost of traditional fee-for-service Medicare for each subscriber.
Thus, the first problem: Each new subscriber to a Medicare Advantage plan means another of the thousands of cuts that are bleeding Medicare to death, which explains why Medicare advocates in the Congress want to reduce the subsidy. You’d help by staying with Medicare.
Also, in addition to the advertising campaigns, the Medicare Rights Center and newspapers report that brokers and agents, some of them claiming to be from Medicare, are convincing beneficiaries to switch from traditional Medicare and sign up for Medicare Advantage plans. They claim, falsely, that beneficiaries may use doctors of their choice. Or they claim what they’re selling is “just like Original Medicare,” said the Medicare Rights Center.
It isn’t, of course, but the salespeople, who are paid commissions, pick on the more vulnerable elderly who live alone. No one from Medicare is authorized to call or visit you to sell you anything. People are being switched without fully understanding what is happening, and when you sign up for a Medicare Advantage plan, despite what you may be told, you must use doctors, labs and hospitals in the plan’s network. You’re no longer in traditional Medicare. And you may not be covered when you visit out of town. Also you’re locked into a Medicare Advantage plan for at least a year.
Third, although you may be told that you need pay only your monthly Part B premium ($93.50 for most people), the drug premiums and drug costs and co- pays for doctor and lab visits can add up.
And the Medicare Advantage premiums (in addition to the Part B premiums) vary wildly depending on where you live. Government subsidies differ from county to county.
For example, in New York, HIP and Empire Blue Cross offer Medicare Advantage plans in Nassau County for no premiums (in addition to the Part B premium) for the health or drug coverage, and they pay for generic drugs in the doughnut hole coverage gap. For comparable coverage in adjoining Suffolk County, HIP charges a $99 monthly premium (in addition to Part B) for the health care, $33.90 monthly for the drugs, with generic coverage in the hole; Empire charges a $116 monthly health premium plus $21.90 a month for drug coverage.
The Medicare Advantage HMOs remain notoriously slow in paying claims, refusing at first an average of 40 percent, according to New York Times columnist Paul Krugman, who reports that angry doctors and hospitals are hiring companies to challenge the insurers. Some insurers are “cherry pickers” seeking to cover the youngest and healthiest clients; others are “lemon droppers,” companies that refuse or drop coverage for the chronically ill.
Depending on your situation (if you travel or need certain doctors and hospitals), a better course is to have a trio of plans good anywhere in the U.S.: Traditional Medicare; a supplemental policy, such as Medigap, and a relatively inexpensive Part D drugs-only plan.
For help in deciding, call the health insurance counseling hotline, 800-701- 0501; Medicare Rights Center, medicare rights.org at 800-333-4114.
Here’s another piece of evidence that this administration is out to kill Medicare. Because the Congress imposed an arbitrary cap on Medicare – premiums must always pay for 15 percent of Medicare’s budget – the Part B premiums are expected to rise by a record 17 percent next year, from $93.50 to $109.40, according to the nonpartisan TREA Senior Citizens League.
For most beneficiaries, that means Medicare premiums next year will have increased 77 percent in six years, wiping out the Social Security cost-of- living increases of 15 percent for the same period. The league estimated that 22 million Social Security recipients will see no cost-of-living increase because of the greater deductions from their checks for Medicare.
More affluent beneficiaries will be socked with premiums approaching $200 a month. That’s certain to drive many people away from Medicare and leave it as a program for the low-income elderly. I believe that has been the administration’s plan.
WRITE TO Saul Friedman, Newsday, 235 Pinelawn Rd., Melville, NY, 11747-4250,
or by e-mail at saulfriedman@comcast.net. Copyright 2007 Newsday Inc.
