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Which to Choose: Medicare or Medicare Advantage?

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Medicare — a federally funded health care program — has been in place since 1965. Since then, a variety of Medicare Advantage plans have become available. In 2023, common beneficiaries will have 43 Advantage plans to choose from. The Kaiser Family Foundation reported.

Medicare Advantage Plans are funded by the federal government like traditional Medicare, but are offered through private insurance companies and pay a fixed amount per enrollee. The idea is that if these insurers, which must cover the same services as traditional Medicare, can provide care more cheaply, they will be able to keep a portion of the federal payments as a profit, thereby containing costs. is.

The largest providers of Advantage plans are Humana and United Healthcare, and these and other companies are aggressively pitching to convince seniors to sign up or switch plans. A new US Senate report has found some of these Advantage Plan practices to be deceptive. For example, some marketing companies sent mail to Medicare beneficiaries disguised as his government website or letters. This is upsetting many seniors, and Medicare officials have promised to step up enforcement.

But marketing has paid off for insurance companies. The percentage of eligible Medicare beneficiaries enrolled in a Medicare Advantage Plan reached 48%. By next year, most of the beneficiaries could become Advantage Enrollees.

credit…Bill Clark/CQ Roll Call via The Associated Press

The two plans operate in very different ways, and the health and economic impact could be dramatic. Each has advantages and disadvantages.

Jeanie Fugresten Viniek, Senior Policy Analyst at the Kaiser Family Foundation, said: A recent literature review comparing Medicare Advantage to traditional MedicareOne of the key findings, Dr. Biniek said:

The Advantage Plan offers simplicity. “This is her one-stop shopping,” she added. The kind traditional Medicare beneficiaries often purchase, called a Medigap policy, “includes a drug plan and doesn’t require a separate supplemental policy.”

Medicare Advantage may seem cheap because many plans have low or no monthly premiums.Unlike traditional Medicare, the Advantage Plan also Reduce out-of-pocket costsNext year, excluding drugs, in-network costs will be under $8,300. Or $12,450 for a higher cost plan that also allows for out-of-network providers.

However, only about a third of Advantage plans (called PPOs or Preferred Provider Organizations) allow that choice. “Most of the plans work like he’s an HMO. You can only go to providers you’ve contracted with,” said David Lipschutz, an associate with the Center for Medicare Advocacy and his director.

Advantage subscribers may also be drawn to plans because of benefits that traditional Medicare doesn’t offer. “Vision, dentistry and hearing are the most popular,” Lipshutz said, but plans could also include gym memberships and transportation.

“I would warn people to check the extent of the actual benefits,” he added. “They may be limited or unavailable to everyone in the plan. Dental care may only cover one cleaning, or it may be more extensive than that. Most Advantage subscribers who use these perks will still pay Out-of-pocket expenses for most dental, vision, and hearing.

One major drawback is that these insurers require prior “pre-approval” or approval for many procedures, medications, or facilities.

“Your doctor or facility says you need more care” — in a hospital or nursing home — “but the plan says, ‘No, five days, or a week, two weeks is fine.’ ,” said David Lipshutz, associate director of the Center for Medicare Advocacy. Then you have to either abandon your care or pay out of your pocket.

Advantage participants who are denied care can appeal, and those who do have a 75% chance of seeing the denial reversed. 2018 Report by the Office of the Inspector General, Department of Health and Human ServicesHowever, only about 1% of beneficiaries or health care providers file a complaint.

Another report this spring by the Office of the Inspector General said: Services Denied by Advantage Plan It would have met applicable Medicare rules and would have been approved under traditional Medicare.

Advantage plans can also be an issue if you travel or spend part of each year away from home. It may not be connected. Find out how the plan you are using or considering handles this situation.

credit…Justin Sullivan/Getty Images

“The big advantage of traditional Medicare is the lack of networks,” said Jeanie Fugresten Viniek, a senior policy analyst at the Kaiser Family Foundation. Like most doctors, “Any doctor who accepts Medicare can see you.” Traditional Medicare beneficiaries also largely avoid pre-approval delays and frustration.

But traditional Medicare doesn’t set a cap on copayments, and that 20% copay can quickly add up for hospital stays and expensive tests and procedures. Therefore, most beneficiaries rely on supplemental insurance to cover these costs. I have purchased a Medigap policy or have supplemental coverage through my employer or Medicaid. Medigap policies are not cheap. a Kaiser Family Foundation Survey I’ve found it averages $150-$200 a month.

A Kaiser review of the literature found that traditional Medicare beneficiaries had less of a cost problem if they had a supplemental Medigap policy than did Advantage beneficiaries.

Traditional Medicare also somewhat improves access to quality hospitals and nursing homes. David Myers, a health services researcher at Brown University, and his colleagues have been tracking the difference between original Medicare and Medicare Advantage for years, using data from millions of people.

The team found the advantage beneficiary to be 10% less likely to access top-quality hospitals, 4-8% less likely to be admitted Nursing home of the highest quality is half as likely to use . Top Rated Cancer Center For complex cancer surgeries compared with similar patients in the same county or zip code.

In general, patients with high needs (those who are frail, have limited activities of daily living, or have chronic conditions) more likely to switch to traditional Medicare than those with less need.

“If you’re healthy, you may face fewer network and pre-approval restrictions,” says Dr. Meyers. “If you have more complex needs, you face them more often.”

However, another drawback of traditional Medicare is that it does not include drug coverage. To do so, you will need to purchase a separate Part D plan.

credit…Kenny Halston of The New York Times

Unlike most Medicare Advantage plans, traditional Medicare does not include drug coverage. To do so, you will need to purchase a separate Part D plan.

For 2023, beneficiaries can generally choose to either: 24 independent Part D planswith premiums ranging from $6 to $111 a month, with nationally available policies averaging $43, said Juliette Kubanski, deputy director of the Kaiser Family Foundation’s Medicare Policy Program.

“If you don’t take many medications or only use generics, your best strategy is to sign up for the plan with the lowest premium,” says Dr. Cubanski. “But if you take a lot of medications, the most important thing is whether the medications you take, especially the most expensive ones, are covered by your plan.

Different plans cover different medications (which can change from year to year) and place them in different price points, so you pay different amounts for them. Additionally, certain pharmacy chains are “prioritized” on certain plans, so you can pay more at CVS than at Walmart for the same drug.

How does Part D work? First, most standalone plans have a deductible. $505 in 2023. Pay that amount out of your pocket before coverage begins.

Second, a Part D plan, either standalone or as part of a Medicare Advantage plan, typically establishes five tiers of drugs. The two cheapest tiers of generic drugs are free or up to about $20 per prescription. The preferred branded tier is next, likely at $30-$45 per prescription in 2023.

Drugs in the next highest tier after non-preferred brand-name drugs are usually accompanied by co-insurance that pays a percentage of the drug’s list price rather than a flat copay. For national independent plans, it ranges from 34 to 50 percent, he said, Dr. Cubanski.

Drugs priced above $830 per month are considered top-end specialty drugs. You only have to pay 25% of the price, but these are very expensive, so the cost goes up.

When your total cost of medicines reaches $4,660 (in 2023), including your out-of-pocket costs and what your plan paid for, you enter the so-called coverage gap phase, where you pay 25% of your costs regardless of tier.

Finally, when the cost reaches $7,400 (including the value of what you paid and the manufacturer’s discount), you’ve hit the catastrophic coverage threshold. After that, you pay just 5%.

You can, but be careful.

Switching between Medicare Advantage plans is very easy. But switching from traditional Medicare to an Advantage plan can lead to big problems. If you had a Medigap policy, you are waiving it. Then, if you later grow dissatisfied and want to revert to traditional Medicare from Advantage, you may not be able to replace that policy. , and may charge high fees.

“Many people think they can try Medicare advocacy for a while, but it’s not a two-way street. Except for states that guarantee coverage, “it’s the one type of insurance that can discriminate based on health conditions,” he said.

In fact, few consumers actually do comparison shopping or shift their scope one way or the other. The dozens of lawsuits accused of fraudulently inflating the profits of Medicare Advantage insurers have apparently not made much of a difference for consumers either.

According to a recent Kaiser Family Foundation study, only 3 in 10 Medicare beneficiaries in 2020 compared their current plan to other plans. Even fewer beneficiaries changed plansconsumer satisfaction, or the difficult task of trying to evaluate the positives and negatives.

credit…Pablo Martinez Monsivais/Associated Press

You can find a lot of information about Medicare.gov websiteincluding Part D plan finderyou can enter the medications you are taking and see which plan offers you the most effective and most economical coverage.

Perhaps the best resource, however, is federally funded. State Health Insurance Assistance Programtrained volunteers can help consumers evaluate both Medicare and drug plans.

These programs are “fair and offer no financial benefit to your decision-making,” says David Lipschutz, associate director of the Center for Medicare Advocacy. However, their reservations tend to fill up quickly at this time of year, and the annual open registration period ends on December 7th. don’t be late.

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