Thinking About Health: Look beyond premium costs when choosing a Medicare Plan

Making decisions about Medicare coverage has never been easy. Over the years the task has become more complicated as Congress has moved to privatize the system.

Open enrollment, the time for evaluating your coverage and making changes if you can, opens Oct. 15 and runs through Dec. 7 this year. This is the first of two columns that address decisions people who are about to become eligible for Medicare and those already on the program will have to make.

While some 57 million people are still in traditional Medicare, which remains a social insurance program, the number of beneficiaries in privatized Medicare known as Medicare Advantage has grown steadily. Today one-third of all beneficiaries have joined private plans, many of them responding to sales pitches - sometimes questionable ones - from insurance companies that now regard their Medicare Advantage business as a major profit center.

With a Medicare Advantage plan, generous payments from the federal government to private insurers allow them to provide a person’s Medicare benefits along with some extras like eyeglasses, limited dental care, and gym memberships. The government payments have been so rich they’ve also allowed the plans to entice people to join by offering coverage with no monthly premium or a very low one.

So the first basic choice is whether to select traditional Medicare - and buy a supplement to fill in what Medicare doesn’t pay - or to select a Medicare Advantage plan.

Increasingly, though, some people may not have a choice. More employers who fund part of their retirees’ health insurance are automatically enrolling their workers about to retire in Medicare Advantage plans, and those workers may not understand what they are getting, said Tricia Neuman, a senior vice president of the Kaiser Family Foundation: “Employers may see this as an attractive way to shift some of the risk to employees.”

A few years ago, I met a retiree of a computer firm in California who had developed Parkinson’s disease and was seeking help from the state’s insurance counseling program to switch out of the employer’s retiree Medicare Advantage plan. He was having trouble seeing the specialists he needed to treat his disease.

Counselors told him he had few options. He could easily drop his Medicare Advantage plan and return to traditional Medicare. But he was no longer eligible to buy a Medigap policy, which he sorely needed.

California, like almost every other state, says insurers offering Medigap policies may scrutinize senior applicants’ health status once those seniors have passed their initial eligibility period. That period is generally the first six months after they sign up for Medicare Part B, which pays for physician services and hospital outpatient care. After that, if you have a preexisting condition, you’re out of luck.

Only New York, Connecticut, Massachusetts and Maine allow seniors to buy a Medigap policy anytime. A few other states allow seniors to buy them under certain conditions - like losing retiree coverage. Seniors living outside those states, though, could be making an irrevocable decision by choosing a Medicare Advantage plan or allowing themselves to be placed in one automatically.

Yet the allure of no monthly premium or a cheaper premium than a Medigap policy would require draws seniors to Medicare Advantage plans. A cheaper premium or no premium sounds good when you’re well, but what happens when you’re sick? That’s when many seniors find they want to go back to traditional Medicare.

“Premiums are not a good way to choose a plan. It’s important to look beyond the premium,” Neuman advises.

Still, not much is knownabout how seniors in Medicare Advantage plans fare when they have a really serious illness. But in late September the Office of the Inspector General reported that insurers offering Medicare Advantage plans may be inappropriately denying services to seniors and called on Medicare to step up its oversight of those plans.

The Office of the Inspector General found that Medicare Advantage plans overturned 75 percent of their denials between 2014 and 2016, raising questions about why seniors were denied in the first place.

“The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided,” the report noted. “This is especially concerning because beneficiaries and providers rarely used the appeals process.” Seniors may be denied services but never register any complaints.

As with all insurance, you make a trade-off. Pay less upfront and more when you get sick, or minimize your risk by paying more in premiums to have better coverage when illness strikes. That is the great-unknown seniors must consider.

Traditional Medicare plus a good Medigap can become your best friends if you have a hospitalization for a serious illness as I had when an infection came out of the blue and kept me in the hospital for four months earlier this year. For doctor, hospital, and rehabilitation charges that totaled some $3.5 million, we paid only about $2,500 out of pocket.

What experience have you had with Medigap policies or Medicare Advantage plans? Write to Trudy at [email protected].