Medicare Advantage: Who Gets the Advantage? False Promises and Hidden Costs

Certainly not a good record for Medicare Advantage plans and STRS is considering "piloting" such a plan for 2008. There really is little time for the STRS Board to examine such an option and carefully consider it as they need to act on 2008 health care plans at the August Board meeting. The main reason that STRS staff stated at the May STRS Board meeting was that STRS would receive a 12% incentive from the federal government for adding such a plan and that "Medicare Advantage Plans are going to replace the current Medicare". Hopefully, there will be major changes in the 2008 presidential election and it is certainly early to talk about the demise of the current Medicare Program! ~ Nancy Hamant

Who Gets the Advantage? False Promises and Hidden Costs

From Suddenly Senior, May 17, 2007

Low-income people with Medicare enrolled in Medicare Savings Programs (MSPs) receive assistance in paying the out-of-pocket costs of Medicare.

Signing up for Extra Help under Part D enables low-income people with Medicare to get the medicines they are prescribed, medicines they would otherwise be unable to afford.

Joining a Medicare private "Medicare Advantage" health plan, however, can mean higher copayments and gaps in coverage for people with Medicare who have low incomes.

Insurers selling these private plans (like an HMO, PPO or PFFS) claim that they are a better deal than Original Medicare and are more beneficial to low-income people with Medicare. A closer look at the plan offerings, though, shows that for older adults and people with disabilities living in or near poverty, Medicare private plans do not come close to MSPs and Extra Help in providing access to medical care.

Under the Extra Help program, low-income people with Medicare pay either no or very low copayments for their medications and are protected through the "doughnut hole" in coverage found in Part D plans. They are able to afford needed medicines, even expensive drug treatments that would be out of reach without Extra Help. Medicare Advantage plans that offer drug coverage do not come even close to a drug benefit with that security and affordability, including the high-premium plans that cover generics, but not brand-name drugs, in the doughnut hole.

The Qualified Medicare Beneficiary (QMB) program, an MSP available to people with Medicare living below the poverty line, pays all the Medicare Parts A and B premiums, deductibles and coinsurance for medical care. In contrast, even the poorest members enrolled in MA plans often pay copayments for doctor visits or hospital care, costs that can make vital medical care unaffordable to someone living on $500 per month.

Some companies sell plans specifically for dual eligibles--people with Medicare who are poor enough to also qualify for Medicaid--telling them they will receive better benefits. Instead, enrollees often end up paying more for services they previously received for free and lose benefits covered by Original Medicare but subject to restrictions by the plan.

Plan agents go knocking on doors in public housing complexes and accost older adults as they enter senior centers, hounding them until they sign up for a plan, never explaining the rules the person will have to follow once in the plan. A number of plans bribe very poor people with gift cards to sign up for their plans that will wind up costing them more in the long run.

Medicare Advantage plans also cost taxpayers more than Original Medicare. Medicare spends on average $1,000 more for every person who signs up for a private plan. In 2007, overpayments will total $7.5 billion. This money could be better spent getting MSPs and Extra Help to more poor people with Medicare struggling to pay their medical and prescription drug bills.

Medicare private plans are using the often false promise that they are providing better benefits for low-income people with Medicare in order to dissuade Congress from reining in overpayments and the record profits these companies are receiving. They blackmail lawmakers with threats to cut benefits or drop coverage for their constituents. Lawmakers need to see through this scam. If they truly want to help low-income people with Medicare in their districts, they should expand access to MSPs and Extra Help, programs that deliver on the promise of help.