Like many of the seniors now enrolled in Medicare Advantage (MA) plans, Tom Mills belatedly discovered its dirty little secret.
Also called Part C, these plans can cover a broad array of health services at low cost -- that is, until one gets sick, at which point out-of-pocket costs can soar. But once in an MA plan, getting out can be even less affordable.
After Mills underwent a mitral valve repair and suffered a mild stroke with no lasting effects, the San Diego resident's plan now charges him hundreds of dollars in monthly copays for drugs and other medical services. He had to pay $295 a night for his hospital stay.
But there was a much bigger shock. Mills, 71, learned that switching out of his MA plan will incur exorbitantly higher costs the next time he needs a serious medical intervention. If he moves to traditional Medicare and a prescription plan, he still needs a supplemental Medigap plan to pick up his 20% copays and deductibles.
Though the retired environmental geologist is training for his 57th half marathon, he now has a pre-existing condition. Medigap plans in all but can and do reject people like him or require prohibitively higher premiums. Diabetes, heart disease, or even a knee replacement can be criteria for exclusion.
A health insurance broker told him no supplemental plan would cover him, and he'd be wasting his time if he applied.
No one told him about this side of MA when he enrolled at age 65. "You hear the pros, but nobody lists the cons."
In the run-up to the Dec. 7 deadline to sign up for Medicare coverage, broadcast ads like one with tout Medicare Advantage's array of services: dental, vision, hearing, gym membership, rides to medical appointments, doctor and nurse visits by phone, and even meal delivery and home aid. "Get what you deserve ... at no additional cost," Namath says. "Call now -- it's free."
But some advocacy groups, including the American Medical Association (AMA), are pushing to mandate tighter plan rules and disclosure, with lists of network specialists. The a resolution calling on the Centers for Medicare & Medicaid Services and other stakeholders, including the senior citizens' lobby AARP, to make the process of choosing Medicare plans less confusing and more transparent.
A similar AMA resolution in 2018 declared that "seniors are lured to these advantage plans by misinformation and confusing sales techniques," and that plan inadequacies result in "delay in nursing home placement for some members," produce "poor service for some members ... due to difficulties with physical therapy and rehab services. The number of days approved (for payment) has tended to be too short and the extent of rehab services too limited."
Kevin Burke, MD, and Deepak Azad, MD, primary care doctors in Indiana, are members of the delegation that sponsored both resolutions.
"If your health is good, maybe these plans represent value for some patients, like providing gym memberships," Burke said. "But that can change in the blink of an eye ... with a stroke or an accident or some acute medical condition and they need a rehabilitation stay." Then, services are restricted so much that "they can't recover adequately from the stroke, or they bankrupt themselves staying another month to get a good recovery."
Then they're eligible for Medicaid, which pays doctors much less.
Bonnie Burns, training and policy specialist consultant for California Health Advocates, said, "The thing that docs should focus on is that people are spending down the resources they have as a result of healthcare costs, and so people who are in an MA plan where they're paying out of pocket for various costs, they're spending down but in the process of spending down, that means more and more people showing up on the Medicaid rolls in that age group. Lots of doctors don't take Medicaid for obvious reasons."
Burke and Azad think Medicare should not let people with serious health risks buy MA plans in the first place. And some critics say MA across the board is basically a scam.
'Confusing' Tools
Medicare.gov websites aren't always clear about the process of transferring out of MA to traditional Medicare with a Medigap plan, but the general bottom line is that getting accepted by a Medigap plan is guaranteed only within the first 12 months after enrolling in Medicare at age 65.
MA plans, which are managed by private insurers, can be very complex, with the potential for substantial out-of-pocket costs when beneficiaries get sick played down. Medigap policies, which pay for many expenses not covered in basic Medicare, may cost more in monthly premiums up front, but once one is enrolled, premiums are set solely through "community rating" and beneficiaries' age. New-onset health issues do not lead to premium increases.
The catch is that if one initially enrolls in an MA plan and then decides to switch out more than a year later, Medigap insurers will take into account the individual's pre-existing conditions, and may decline coverage or demand high premiums.
The newly revised Medicare Plan Finder does not explain this possibility. Nor does another CMS , "Join, switch, or drop a Medicare Advantage plan."
A third Medicare.gov , "When can I buy Medigap?" is more specific, explaining in the third section that "there's no guarantee that an insurance company will sell you a Medigap policy if you don't meet the medical underwriting requirements," meaning the Medigap issuer's stance on pre-existing conditions.
Yet does explain that if beneficiaries enroll in a Medicare Advantage plan at age 65 and want to get out, they must do so within 1 year, and then they have another 63 days from the disenrollment date to buy a Medigap plan without risk of coverage denial or being subject to underwriting.
But many of these documents are full of terms unfamiliar to ordinary laypeople, Burns pointed out. "Networks and copayments and formularies and uncovered costs and appeals and who knows about that stuff? That doesn't happen until you get sick. No one understands their insurance coverage until they have to use it."
Other Complaints
Besides MA's lack of transparency on costs, critics also cite problems with insurers' provider networks. The to make sure networks are adequate and list physicians, their specialties and subspecialties, and how many actually cared for plan members the prior year.
AMA spokesman Robert Mills (no relation to Tom Mills) referenced a Kaiser Family Foundation that found 35% of plans studied were served by a "narrow" physician network, meaning that fewer than 30% of the physicians in that county were contracted.
"Plans may purposefully understaff specialties to avoid attracting enrollees with expensive pre-existing conditions like cancer and mental illness," he said.
David Lipschutz, an attorney with the Center for Medicare Advocacy in Washington, D.C., also hears about limitations. "It's a common scenario," he said. "Often you have to jump through certain hoops or over certain barriers to access care, or it's subject to prior authorization."
His colleague, attorney Toby Edelman, has heard beneficiaries complain about plans that have two nursing homes in their network. "There are 50 in your area, but they have two and these are not the best."
At California's , San Diego manager David Weil hears horror stories too. "If they answer yes [on a questionnaire] to something the company doesn't like, the company won't sell them a policy. Almost anything can be on their list."
Why do people want to switch? Weil described it as a "funnel effect, the feeling that you have to squeeze through an ever-closing hole in order to get services ... Or you have to wait eight weeks to see a specialist. People get fed up with that."
Last month, veteran consumer advocate as nothing more than a way to enrich health insurers at seniors' expense. Calling the plans "Medicare Disadvantage" and a "corporate trap," Nader took the AARP, which offers its brand of Medicare Advantage through UnitedHealthcare, to task for being asleep on the issue, and in conflict because it gets a 4.95% commission.
AARP spokesman Gregory Phillips responded: "AARP supports increasing access through guaranteed issue to Medigap coverage, in addition to eliminating medical underwriting and age rating, to ensure that older Americans will get the coverage they need when they need it most."
And he agreed that many beneficiaries may not be aware that plans "may terminate their relationship with Medicare in any given year; change the premiums, cost-sharing charges, or benefits from year to year (including drug coverage); and drop physicians from their networks during the year."
"Beneficiaries may also not be aware that if they want to voluntarily leave an MA plan and return to traditional fee-for-service Medicare, they may be subject to medical underwriting for a Medicare supplement (Medigap) policy. This underwriting may result in their being refused a policy or being required to pay higher rates."
But Phillips defended AARP's participation in MA, saying it provides information on both MA and traditional Medicare plans.