Medicare for Some

Five years ago when I turned 65 it was time to choose my Medicare path. The choice took about five minutes. I knew nothing about Original Medicare, MediGap plans, and Medicare Advantage plans (except that Original Medicare sounded a bit like KFC Original Recipe). So I chose the Medicare Advantage insurer that still advertises “the only Medicare plans with the AARP name, for more than 20 years. These plans stand for quality, value and service.”

That quote is from an ad is in the October 2023 AARP Bulletin, sent to all 38 million AARP members just in time for Medicare Open Enrollment (which runs from October 15 to December 5). Then on October 13th, the Medical Director of UNC Healthcare (the university system where my partner and I go for medical care) sent their patients who are insured by that Medicare Advantage plan this letter:

 We are writing to tell you about a possible change in your ability to use UNC Healthcare’s provider network… UNC continues to work toward a new agreement with United Health Care. However, UHC is not negotiating in good faith.

So much for “quality, value and service.”

Up to the day I received that letter, I had reveled in the freedom Medicare provides. I can work for myself as a writer and never have to worry about losing coverage or having a big increase in my insurance premiums. The healthcare professionals I consult have up to now been in network and happy to accept my insurance. I am such a fan that I’ve been saying for years that everybody – not just those over 65 – should have Medicare. Then suddenly, with that Friday the Thirteenth letter, it was time to learn how the sausage is made.

First off, in case you are turning 65 and about to choose a Medicare pathway, there are two basic ways to go, and it’s a big fork in the road.

• One way is what I (and over 50% of retirees now) have: A Medicare Advantage plan through a private insurance company that contracts with Medicare.
• The other way is to choose original Medicare, and layer on a Medigap plan through a private insurer.

The key thing to know about this choice is that in most states, Medigap insurers are legally required take you as a client at a set premium when you turn 65, but can turn you down or charge you a much higher premium if you change to this path later on. So the fact that I chose a Medicare Advantage plan when I was 65 limits my choices now that I may lose access to my healthcare system.

Research has shown that most people who choose Medicare Advantage over original Medicare do not understand the implications of that choice. A study by KFF (formerly known as the Kaiser Family Foundation) found that the marketing practices of Medicare Advantage plans included implying that the ads themselves were government sponsored, and that original Medicare is somehow deficient. The advertisement blitz at Open Enrollment time is “marketing madness,” according to the head of KFF. The Commonwealth Fund found that 19 percent of Medicare eligible persons reported receiving fraudulent phone calls or seeing fraudulent advertisements for Medicare Advantage plans. And besides defrauding potential insureds, Medicare Advantage insurers have been accused of massive fraudulent claims against the government for payment of services not rendered.

As I found this month, Medicare Advantage plans are freely able to add or drop in-network providers. And going out of network can involve substantially lower covered payments or denial of claims. And while Medicare Advantage plans can offer lower premiums than a Medigap plan layered on original Medicare, some hospitals are dropping Medicare Advantage insurers because their payments are slow or repayment schedules are often denied and /or slow.

So what will I do next? I do not live in one of the four states (Connecticut, Maine, Massachusetts and New York) that provide legal protections to people wanting to switch from Medicare Advantage to a Medigap plan on top of original Medicare. I am therefore at another fork in the road.

• I could switch to a different Medicare Advantage plan, if there is one that continues to work effectively with my university healthcare system. And how long will that relationship continue? Who knows?
• Or I could switch to original Medicare, which assures me of coverage for whatever doctor I choose. This is very appealing – but because Medicare per se has no out-of-pocket cap, I could potentially incur high costs in later years if my medical care becomes more complex. And at this point, how much would I pay for a Medigap supplement? I’m long past the lower premiums guaranteed to a new Medicare enrollee.

In his letter to patients, the Medical Director of UNC Healthcare urged us to call the Medicare Advantage insurer and tell them to negotiate in good faith. How persuasive will this be, for a company so intent on maximizing profits that they’ve run afoul of the US government? I will also contact AARP and suggest they rethink their link with this insurer. But the main focus of my time will be comparing the dollar costs of what comes next. I will also ask questions of the volunteers at the Seniors’ Health Insurance Information Program (SHIIP) here in North Carolina. This program was reinstated in 2021 after clients objected to a program paid for by insurance vendors. SHIP is a nationwide program, and you may want to talk with volunteers in your state.

Medicare is great. But the private entities that are entwined with Medicare are problematic. And the next time I advocate Medicare for All, I will stipulate, “That’s Original Medicare for All.”