It is once again open season for selection of a Medicare plan and the airwaves are insulated with advertisement urging people to select Medicare Advantage over traditional Medicare. The advertisement campaigns for Medicare Advantage are as ubiquitous and as misleading as the advertisements for a political candidate in the closing days of a campaign.
Some Medicare Advantage plans provide good comprehensive health insurance, but some plans are inadequate and the selection of Medicare advantage over traditional Medicare always creates substantial limitations in health care choices and financial risk.
A recent Wall Street Journal article describes the potential catastrophic impacts of the choice of Medicare Advantage on people who choose Medicare Advantage over traditional fee-for-service Medicare. One applicant enrolled in a Medicare Advantage plan found he could not obtain adequate treatment after being diagnosed with prostate cancer and was unable to both switch to a combination of traditional Medicare and Medigap because the best time to purchase a Medigap policy is immediately upon turning 65.
Several government studies, academic papers, and news reports show many Medicare Advantage plans provide limited access to doctors and hospitals.
- This article discusses Vanderbilt Health dropping some Medicare advantage plans in Tennessee.
- This article discusses the exclusion of some Medicare Advantage plans by a health system in Oregon.
- Research summarized here found that Medicare Advantage enrollees in rural areas of California had difficulty obtaining access to specialists.
Another difference between Medicare Advantage and traditional Medicare is that Medicare Advantage plans often require prior authorization for treatments or even to see a specialist while Medicare does not.
A recent survey conducted by the American Medical Association (AMA) found that 94 percent of doctors found prior authorizations delay care, 80 percent of respondents found that prior authorization could lead to patients abandoning a prescribed course of treatment, and one third of doctors stated that prior authorizations led to an adverse medical outcome.
A report by the office of the inspector general from the Department of Health and Human Services found that 13 percent of denials of denials of prior authorization requests by Medicare Advantage plans would have been automatically approved under standard Medicare guidelines. The auditor found in some cases a claim of inadequate documentation by the Medicare Advantage plan was incorrect. Medicare Advantage plans appear to be routinely denying requests for services that the provider deems medically necessary.
Many individuals choose Medicare Advantage plans over traditional Medicare plans to lower premiums and obtain extra benefits. The Biden Administration is finalizing rules targeting misleading advertisements for Medicare Advantage plans.
However, misleading advertisements are not the major problem in this industry. Honest Medicare Advantage advertisement lacks information about the risks inherent to narrow-network health insurance which restricts access to specialists and hospitals and denies requests for medically necessary procedures.
There is considerable support for Medicare Advantage on both side of the political aisle because these plans lower costs to taxpayers and enrollees. Donald Trump signed an executive order expanding Medicare Advantage plan. Medicare Advantage plans were a central feature of the health care reform plan offered by Vice President Harris when she was a candidate for president.
Go here for a better way to balance the need to control costs and provide comprehensive quality health insurance coverage.
Many doctors warn their patients about the risk associated with Medicare Advantage plans but the warnings are drowned out by a barrage of advertisements.
People are making their choice of Medicare plan based on advice from commercials and salespeople rather than health professionals capable of weighing relative risks. Perhaps the best advice on the question of whether one should select a Medicare Advantage plan would be the same advice given by Nancy Reagan to teenagers considering drugs — “Just Say No.”
Authors Note: The author of this newsletter has examined several financial topics including student debt, interest rates, the use of 529 plans to fund a Roth IRA, and the need for people near retirement to prioritize elimination of the mortgage. Please subscribe to Insightful Memos.