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Thread: Medicare Revelation

  1. #1
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    Medicare Revelation

    I just discovered something about Medicare and want to pass it along to others who might be on Medicare or who will soon be on Medicare.

    Some background: There are two ways you can take Medicare. You can take “Original Medicare” or you can take a “Medicare Advantage” offering.

    With original Medicare, Medicare pays 80% of most charges and you can purchase a Medicare supplement policy that will pay the other 20%. When you turn 65 and choose Original Medicare, the companies offering the supplemental policies have to take you, no matter what pre-existing conditions you might have. On Original Medicare you can go to any doctor who accepts Medicare, whenever you choose and as often as you choose.

    If you choose a Medicare Advantage plan, you don’t purchase a supplemental policy – the Advantage plan covers all your medical costs. The Medicare Advantage plans are HMOs.

    The Medicare Advantage plans are growing, I assume because of the costs advantage.

    At any time during open enrollment you can switch between plans.

    However, there’s an issue that I just learned about.

    The “problem” with a Medicare Advantage plan is that it’s an HMO and that means you have to go to doctors in the plan and you may need a referral from your primary doctor to see a specialist. Some people, when faced with a life threatening diagnosis, choose to switch from the Medicare Advantage plan to Original Medicare so that they can choose which specialist they want to have treat them. And this is where the problem comes in.

    You can switch from a Medicare Advantage plan to Original Medicare at any time (during open enrollment), but the companies who offer the supplemental plans are not required to accept you. And if you have some life threatening (expensive) diagnosis they will either not accept you or the costs will be extremely high. They only have to accept you during the initial enrollment period when you qualify for Medicare at age 65.

    Nobody ever tells you this when they sell you the Medicare Advantage plan.

    Basically, what this means is that once you go with a Medicare Advantage plan you’re pretty much stuck in an HMO unless you can afford to pay the 20% yourself or very high prices for the supplemental plan, especially once you get a life threatening diagnosis.

    My advice: Think carefully about enrolling in a Medicare Advantage plan. It could be a one way street.

    Mike, who is on Original Medicare.
    Last edited by Mike Henderson; 03-06-2020 at 10:39 PM.
    Go into the world and do well. But more importantly, go into the world and do good.

  2. #2
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    I just went through the whole figuring out Medicare thing. I have many members of my family in the healthcare industry and they all cautioned against signing up for a MA plan for several reasons, one of which is the one you point out. For someone who is healthy, and stays healthy (who has *that* crystal ball), and doesn't travel much (if you are traveling, you are almost certainly going to be out of network), then the plans can save you money.

    A big hint is how many robo calls and fancy glossy brochures you get in the mail from the MA companies as you approach 65, and the number of ads on TV. They push it very hard because it's a good deal for the companies, not necessarily for the customers.
    --I had my patience tested. I'm negative--

  3. #3
    The Medicare Advantage model is fairly simple.

    The Feds pay the MA plan roughly 92 cents out of every dollar that they would have otherwise spent, paid to the plan on a per member per month basis. From that point on the plan has accepted delegated responsibility for the member's Medicare benefits and the Feds have saved 8%. So how do the MA plans make a living at the discounted reimbursement? Three prong strategy: (1) Build a provider network that has agreed to lower pricing than Medicare pays them (usually these will be the lower grade providers who are a little more desperate for business and hence will agree to lower rates) (2) Ration the care using a team of case managers to deny benefits wherever possible, (3) Drag out payment to providers to make more float interest on the money. This can include finding ways to deny payment altogether for failure to obtain prior authorization or meet complicated billing requirements.

    To draw a parallel to an industry that many of us are familiar with, this is like the general contractor whose mode of business is to win business as the low bidder by using the cheapest possible subs, cutting quality corners wherever he can, and not paying his bills timely or sometimes at all.

    For anyone on a MA plan, please be aware that you have the right to file an appeal for any decision or action your plan takes, and there is a fast track (<72 hour) method for adjudicating these appeals. It involves a third party company designed as a "QIO" Quality Improvement Organization. These companies contract with the Medicare program to provide review of cases to hold the MA plans to task. So if a case manager is trying to ration or deny your care, or kick your loved one out of a hospital early, file a Medicare appeal ASAP. Often the MA plan will back off immediately because if they receive too many dings from the QIO it triggers a compliance flag for them with the Medicare program. In my experience this remedy is not widely known.

    These comments come from a former hospital CFO who has lived inside the sausage factory of healthcare. My advice to anyone is concern yourself with preventive health and minimizing or forestalling your reliance on the health care system. There are a lot of good people who work in the industry, but the incentives for the management of care too often have less to do with the patient's well being than we'd like to think.

    Edwin
    Last edited by Edwin Santos; 03-07-2020 at 12:43 AM.

  4. #4
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    Mike, your information definitely gives people something to think about. Hopefully, you did not learn this the hard way after an illness.

    I once had a girlfriend who made a killing selling a Medicare Advantage plan. It didnt take for me long to figure out it is not hard to sell a product that does not require a direct out of pocket cost.

  5. #5
    My wife's been on medicare for 18 years. About oh, 8 years ago I decided to add her to the Humana thing. First thing that happened was her monthly check increased by nearly $100. Yeah, the 'in network' thing can suck, her doctor of 28 years wasn't in the network until just last year, so all his expenses have been out of pocket. However, he discounts his rate for non-insured like 40%, so I look at the extra $100 as how HE gets paid. So we're basically even on that. Then one night in March 2016, about 2am Sunday morning, my better half, who's suffered from migraines her entire adult life, has a really bad one come on. She declined a trip to the emergency room, figuring it was just a really bad migraine. TWO DAYS LATER she's had enough of the pain so I take her to emergency. After an MRI found a brain bleed, they pumped no less than 15 bottles of 'cocktails' into her veins over the next 6 hours, followed by an ambulance trip to the U of U hospital. Once there, they determined she'd suffered a Subarachnoid hemorrhage. (I'm not too worried about Covid-19, look up the mortality rates of an SAH...) She spent 11 days in ICU and 3 days of followup, had 2 angiograms and several x-rays and other tests, Once home we got the bills; ER and ambulance was just south of $9k, the hospital a bit north of $115k... I was fully expecting $15-$20k out of pocket. Instead, our end was $1,845... and the next summer after that, I accidentally pinned her between the back of our motorhome and the chainlink fence at our storage lot, hurt her pretty bad-- the ER trip that day was over $14 grand, our out of pocket was $75...

    The catch? The U of U hospital was out of network, but obligated to take her in as the only facility close enough to keep her alive, but afterward they DID invite us NOT to show up to their place ever again. But seriously, we have no complaints AT all. If the difference between looking at 20% of the bill or the high supplemental insurance premiums vs. an average of 1.4% of the bill (and getting an extra $100 a month) is going 'in network'-- For me that's a no-brainer. (I've been on the Humana plan since I turned 65 last July )

    Works for us, but of course, this may not work for others, due diligence applies...
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  6. #6
    Quote Originally Posted by Kev Williams View Post
    My wife's been on medicare for 18 years. About oh, 8 years ago I decided to add her to the Humana thing. First thing that happened was her monthly check increased by nearly $100. Yeah, the 'in network' thing can suck, her doctor of 28 years wasn't in the network until just last year, so all his expenses have been out of pocket. However, he discounts his rate for non-insured like 40%, so I look at the extra $100 as how HE gets paid. So we're basically even on that. Then one night in March 2016, about 2am Sunday morning, my better half, who's suffered from migraines her entire adult life, has a really bad one come on. She declined a trip to the emergency room, figuring it was just a really bad migraine. TWO DAYS LATER she's had enough of the pain so I take her to emergency. After an MRI found a brain bleed, they pumped no less than 15 bottles of 'cocktails' into her veins over the next 6 hours, followed by an ambulance trip to the U of U hospital. Once there, they determined she'd suffered a Subarachnoid hemorrhage. (I'm not too worried about Covid-19, look up the mortality rates of an SAH...) She spent 11 days in ICU and 3 days of followup, had 2 angiograms and several x-rays and other tests, Once home we got the bills; ER and ambulance was just south of $9k, the hospital a bit north of $115k... I was fully expecting $15-$20k out of pocket. Instead, our end was $1,845... and the next summer after that, I accidentally pinned her between the back of our motorhome and the chainlink fence at our storage lot, hurt her pretty bad-- the ER trip that day was over $14 grand, our out of pocket was $75...

    The catch? The U of U hospital was out of network, but obligated to take her in as the only facility close enough to keep her alive, but afterward they DID invite us NOT to show up to their place ever again. But seriously, we have no complaints AT all. If the difference between looking at 20% of the bill or the high supplemental insurance premiums vs. an average of 1.4% of the bill (and getting an extra $100 a month) is going 'in network'-- For me that's a no-brainer. (I've been on the Humana plan since I turned 65 last July )

    Works for us, but of course, this may not work for others, due diligence applies...
    This probably varies by state, and by whatever private handshakes take place behind the scenes, but it sounds like you got really lucky, most of the horror stories are in the opposite direction.

    There is a supplemental part B, called "type F" or something like that, that takes care of the extra 20% but with a high deductible (something like $2k) and costs less than a hundred a month. _That_ is the best deal going. There's been some talk of phasing it out for new enrollees, which I hope will not happen.

    Now if we can only get rid of the providers who won't take Medicare at all....

  7. #7
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    Last year at this time, I was still working but being nudged toward retirement on my 65th birthday in June. I was having health issues and after several months and a battery of tests it was determined that my pericardium [the sac around the heart] had hardened and calcified to the point that blood flow was being restricted. At the same time, as most people have experienced at 64 years old, I was being deluged with mailings of offers of medicare advantage programs that would cover up to and including everything that I could possibly ever need as far as care. I even went to a local Seniors Center meeting to learn all about the ins and outs of Medicare. That turned out to be a sales push for an advantage plan. Although the speaker ignored this section, the Medicare booklet they provided had details of original Medicare and Medigap supplemental policies. Never one to like being hoodwinked, I decided to look into the Medigap route and finally elected to go with original Medicare and a supplemental policy that costs about $104 per month. In July I had a pericardiectomy [open heart surgery] at University of Michigan by a highly recommended surgeon. To abbreviate this story, my bills including tests at the local hospital, local cardiologist care and reference to UM, surgery with all the incumbent charges, 5 days at UM hospital, more post surgery testing all totaled were in excess of 250K. With Medigap supplemental G and original Medicare my out of pocket has been about $2500. My premiums for the supplemental policy did not go up this year either. I feel like for me anyway, my choice was the right one.

  8. #8
    At our house we go 2 different ways. My wife with preexisting conditions went with regular Medicare and got the part B (Category G) supplement through Anthem BC/BS at a reasonable rate. I am on regular Medicare with no supplement. My part B is the Veteran's Administration. Fortunately I m exempt from the means test which I would fail. My 2 Purple Hearts from Vietnam actually turned out to be worth something after all. In spite of all the complaints in the media about the VA, I have had nothing but excellent care and and completely satisfied. As for MA plan advertising, I still get tons of solicitations after turning 65 six years ago. It'll probably never end.
    Last edited by Dave Anderson NH; 03-07-2020 at 10:51 AM.
    Dave Anderson

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  9. #9
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    My wife is on regular Medicare with a supplemental insurance. In December she was hit with multiple health related problems. Heart related, loss of blood, and worst of all a massive tumor in her breast. Spend 8 days in the hospital with every test imaginable and 2 surgeries. Over $100K we had to pay 0 dollars, now going through chemotherapy, has had 6 rounds so far with 11 more to go. Then surgery followed by radiation. We still have not paid 1 dollar for any treatment or appointments with oncologists or cardiologists. Medicine is costing a couple hundred a months but we consider ourselves fortunate everything else has been covered.

  10. #10
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    There is a supplemental part B, called "type F" or something like that, that takes care of the extra 20% but with a high deductible (something like $2k) and costs less than a hundred a month. _That_ is the best deal going. There's been some talk of phasing it out for new enrollees, which I hope will not happen.
    New enrollees can no longer get a type F supplemental as of Jan. 1. If you already have one, you can continue on it. The Type G plan includes everything the type F did, except coverage for the medicare deductible. There are no longer any medigap plans that are allowed to cover the deductible. The type G medigap plan that I have has no deductible, it starts paying pretty much everything Medicare B doesn't cover right away (except for the Medicare B deductable).

    I went with original Medicare, A & B, an inexpensive but highly rated drug plan (type D) (even though I am on zero meds) and a medigap G plan. The monthly cost for it all is less that what my wife was paying to include me on her health insurance.
    --I had my patience tested. I'm negative--

  11. #11
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    You can switch from a Medicare Advantage plan to Original Medicare at any time (during open enrollment), but the companies who offer the supplemental plans are not required to accept you. And if you have some life threatening (expensive) diagnosis they will either not accept you or the costs will be extremely high. They only have to accept you during the initial enrollment period when you qualify for Medicare at age 65.
    That right there is THE single most important piece of information anyone should take away from this discussion.

    Once you sign on board the Advantage plan - sucked in by the (supposed) no or low cost, you burn your bridges back to the far better coverage and far less expensive (in the long run) supplement plan(s).

    Of course - life and politics in this country being what they are.......those of use that actually - like - look into these things and try to do the right thing to begin with - will take it tough.
    Meanwhile, the whiners that are too lazy to bother and more concerned about the right now - - will eventually whine their way by.
    (God - I'm glad I'm old and going to die soon.....)
    My granddad always said, :As one door closes, another opens".
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  12. #12
    I'm 83. I am an advocate of Medicare Advantage simply because it works and saves us tons of money. Several years ago we were on the regular medicare and bought supplemental insurance to the tune of several hundred a month for the two of us. We picked our own doctors without having to get referrals. Net result--for this small convenience we paid several hundred a month and because we have been fairly healthy it was a total waste of money.

    Seven or eight years ago I switched to MA and have been kicking myself for not doing it sooner. It has saved us a ton of money and our medical care hasn't suffered a bit. BTW, our doctors were all on the plan.

    Two years ago I had cataract surgery, which was nothing short of a miracle, and my expenses were less than $200 including two pairs of prescription glasses. I would not consider switching back to regular Medicare.
    Mike Null

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  13. #13
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    Quote Originally Posted by John Goodin View Post
    Mike, your information definitely gives people something to think about. Hopefully, you did not learn this the hard way after an illness.

    I once had a girlfriend who made a killing selling a Medicare Advantage plan. It didn't take for me long to figure out it is not hard to sell a product that does not require a direct out of pocket cost.
    Thank you for your note. No, I've been on Original Medicare since I turned 65. I've seen the way HMOs operate. They're a business and they're in business to make money. That means they have to spend less than Medicare pays them. One way to do that is to try and keep people healthy and they generally stress that approach. They also try to enroll healthy people. But you can only do so much with these two approaches. The real savings come from rationing care.

    They may, for example, contract with your primary care doctor on a capitation basis. In capitation, the doctor receives a fixed amount of money for each patient assigned to him/her and usually has to pay for all the tests and referrals made. In this environment, the doctor is under a strong financial incentive to limit services to you. Whatever the doctor does not spend is his/her profit.

    In capitation, the doctor's interest is not aligned with the patient's interest.

    Even if you're not in a capitation environment (and even if you are), they may ration care by only having a limited number of specialists. So when you call the specialists for an appointment you may find that the next available opening is several months away.

    Original Medicare has it's problems, also. When you have a supplemental plan with Original Medicare you don't pay anything for your care. This can lead to overutilization. There are many stories of lonely seniors who go to the doctor just to have some human contact and to have a person listen to them. While this is wasteful, at least it does not put your health at risk as can happen with an HMO.

    Mike
    Go into the world and do well. But more importantly, go into the world and do good.

  14. #14
    Quote Originally Posted by Rich Engelhardt View Post
    Once you sign on board the Advantage plan... - sucked in by the (supposed) no or low cost, you burn your bridges back to the far better coverage and far less expensive (in the long run) supplement plan(s).
    just wanted to say this again: When I signed the wife onto Humana, her SS check INCREASED $100-ish per month. So, no matter how you slice or dice the numbers, the wife has earned nearly $10,000 extra in 8 years just because of her advantage-plan.

    The downside............. ?


    ========================================
    ELEVEN - rotary cutter tool machines
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    ONE - vinyl cutter
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  15. #15
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    Quote Originally Posted by Mike Henderson View Post
    ...If you choose a Medicare Advantage plan, you don’t purchase a supplemental policy – the Advantage plan covers all your medical costs.....
    That must depend on the plan. With ours, visits to our Primary Care Physician are $10. Specialists, whether it's cardiology or physical therapy, are usually $40. There are co-pays for hospital stays and just about everything else, but they're mostly reasonable. Overall, we've been satisfied and we like the HMO concept but it's eye-opening to read your message about Medicare supplements.

    Quote Originally Posted by Jon Grider View Post
    ...my bills including tests at the local hospital, local cardiologist care and reference to UM, surgery with all the incumbent charges, 5 days at UM hospital, more post surgery testing all totaled were in excess of 250K. With Medigap supplemental G and original Medicare my out of pocket has been about $2500....
    With our Medicare Advantage plan, out of pocket for my triple bypass including 8 days in hospital was in the same ballpark.

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