Every year at this time I am reminded of a presidential debate in the early 1980s between Ronald Regan and Jimmy Carter. To a criticism of one of Reagan’s campaign promises made by President Carter, Reagan replied “There you go again.” Those of us who watched that debate, now of Medicare age, remember its deflating effect on Carter.
I have that same feeling Reagan must have had when medical insurance companies flood the airwaves. They make promises of all the extra benefits people will get by changing from regular Medicare to Medicare Advantage plans, such as “low” or “no” premiums, vision and hearing benefits, and on and on. My feeling of “there you go again” is because I have been on the front line for many years and I know these promises are not true. Allow me to explain why.
Medicare can be confusing, even for doctors. It is divided into four parts: Part A, Part B, Part C, and Part D. Part A pays your hospital bill. It pays your room and board and for all of the lab tests, x-rays, ultra-sounds, EKG’s, etc., which are done during your hospital stay. You have been paying the premiums for this coverage for years because they are the Medicare taxes withheld every time you received a pay check.
Part B of Medicare pays the doctor’s bill. This is the case whether your doctor cares for you in the hospital or in an office. Medicare determines what the doctor can charge you for these services, and pays eighty percent of that charge. You are responsible for the remaining twenty percent. The premium for Part B coverage is withheld from your Social Security check each month. It is not the same for everybody. People who continue to work and earn income after they begin receiving Social Security pay more, depending on how much they earn.
Medicare Part C is optional. It represents the twenty percent of doctor’s charges which are not paid by Part B. A Medicare recipient can pay this cost out of pocket or purchase private insurance for this purpose. It is sometimes called “C plus.”
Medicare Part D is for medication coverage which is required and is also income-based. The more money you make after going on Social Security, the higher the cost of your drug coverage.
It is in Parts C and D that Medicare “Advantage” plans enter the scene. The government gives the insurance company a portion of the Part A premium which you already paid for with your Medicare payroll taxes. The Medicare Advantage plan is given your Part B premium, so your Social Security check will remain the same. The Medicare Advantage company then steps in to cover Part C and Part D. This is what seems to be attractive to Medicare recipients: the premium (or no premium) pays for Part C and Part D.
Stay with me now, because the rules change.
The charges for your hospitalization are now the responsibility of Medicare Advantage and they are not controlled. The hospital can charge Medicare Advantage whatever it wants. Doctors who care for you in the hospital or in their office can do the same.
So then, how does your Medicare Advantage plan care for you and still make money? They do it off of your back.
First, unlike regular Medicare which does not question your doctor’s decision to hospitalize you, Medicare Advantage requires the hospital to call them with the medical rationale for admission to obtain their permission. If they say “no,” they will pay for twenty-four to 48 hours of care, and any test or consultations are covered as if you were at home as an outpatient. If you require transfer to a larger hospital – capable of more complicated care (for example, heart catheterization or specialized surgery) – the receiving hospital must obtain permission from Medicare Advantage under the same scenario as indicated above.
Medicare Advantage insurers contract with some, but not all, of the doctors in a community. When you need to see a doctor you are required to use the doctor they have a contract with. If you want to use a doctor that is not contracted with your Medicare Advantage Plan, you are responsible for the bill, and there is no limit on what the doctor can charge (as there is in the case with regular Medicare). Faced with this situation most people leave the doctor who knows them best and transfer to the Medicare Advantage doctor.
When the doctor sees you and wants to get tests and x-rays, approval must come from the Medicare Advantage company doctor. This doctor is not a practicing physician, but rather receives a salary from the company. The incentive is to turn down your request and make more profit for the company. Your doctor’s office may spend as long as two hours on the phone awaiting approval. It is easier sometimes to just “give up” and get a chest x-ray approved when a CT scan would have been much better. And you may still be responsible for a co-pay.
Medicare Advantage plans cover Part D drug coverage. The company decides which medications they will cover in any given drug class. Obviously, they pay for only the cheapest drug in that class. If your doctor decides you need to receive a more expensive drug, permission must be once again sought from the insurer.
In 2015, Humana – a company strongly involved in Medicare Advantage plans – paid its CEO 24 million dollars. Where do you think that money came from? The year before, United Healthcare paid its CEO the highest salary of any corporation in the United States. Where do you think that money came from? You!
Remember, the Medicare Advantage plans were developed to keep people healthy so they would not have to pay for them when they are sick, which is much more expensive. It was to be a win-win arrangement where both parties were benefitted. The patient was healthier and their company earned its profits by avoiding having to pay for sick care.
I am arguing that Medicare Advantage plans do not improve patients overall health and they make their huge profits from denying care.
Medicare Advantage plans cost less up front. But they could cost you your life if a diagnosis was missed that could have been made by a CT or MRI scan they refused to cover. Patients who choose regular Medicare can choose their own doctor. Your chosen doctor can order the tests and x-rays that are in your best interest, and can do it without spending the time on the phone pleading your case to a doctor who has never met you and who is paid to say “no.” These Medicare Advantage plans make their huge profits off of your back. The bottom line: there is no “free lunch”. You get what you pay for.
