MEDICARE DISADVANTAGE PLANS

That's no typo about the "disadvantage."

The Advocacy Newsletter: Connecting.... the Dots

Volume 8     Number 412

                                                 

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In case you don’t know, Medicare Advantage Plans is the real name. They are frequently hawked on TV by Joe Namath, the legendary New York Jets quarterback of the 1960s and 70s.. The reason you might not know about this is that the commercials are not targeted toward you if you’re not eligible for Social Security. They are prevalent on the likes of black & white 1940s noir mysteries, Angela Lansbury in Murder She Wrote, old situation comedies, the reruns of the Lawrence Welk Show, and the like.

These commercials are aired frequently later in the year (this year from October 15th to December 7th) when Medicare contracts are up for renewal and can be continued or changed during this open enrollment period. The ads featuring ol’ Joe have been aired since 2018, and this version depicted here has been shown incessantly, 7.7 billion exposures since 2020.

The commercials are garbed in patriotic red, white, and blue, inviting the viewer to call a seems-to-be government service, Medicare Coverage Helpline. Many seniors, especially disabled ones, have been tricked into thinking they were dealing with a government agency, only later to find out they had been duped, and they weren’t getting the medical coverage they used to get under Original Medicare.

Callers are really reaching a private entity from a company called Benefytt Technologies, a private equity firm, which represents major private insurance companies that are competing with the Original Medicare. (Almost everyone receives basic Medicare coverage based on their lifelong contributions (Part A) and subscribes to a secondary coverage (Part B) but this only covers a prescribed portion of healthcare costs, not including pharmacy. So, most users also subscribe to a supplementary (Medigap) policy—this is where you must choose between an Original Medicare policy and if desired, a drug costs plan, Part D, or a Medicare Advantage plan.) The caller will be directed to one of these companies, supposedly based on their personal needs, but probably to the one who will pay Benefytt the highest commission for the referral.

In the commercials, Joe speaks about features such as lower or no premiums, additional free benefits such as hearing aids, eyeglasses, dental care, limos to health care appointments, private home aides, free fitness center membership, and home-delivered meals, in addition to the Original Medicare standard doctor and prescription coverage. Sounds good. But wait a minute. Not all these benefits are offered by any one plan, with one exception. Most may have only one or two of these fringe benefits. And the coverage in case of illness or accident is not at all identical to the Original Medicare supplemental plans (identified by letter names).

Medicare came into being in the 1960s when Lyndon Johnson signed it into law. At that time only the Original Medicare Plan was offered. In the 1970s, Congress at the behest of Republicans created what later came to be known as the Medicare Advantage Plan option.

The intention was to create lower cost, innovative alternatives that would provide competition to the Original version and introduce options. They did this, and over the years it has grown so that 42 percent of the Medicare population, or 26 million, now have an Advantage Plan. This is expected to reach 50 percent in a few years.

The problems with the Medicare Advantage Plan start with the fact that few seniors remain free of illnesses. And once you are ill, Advantage Plan owners face numerous hurdles in getting needed medical care. These problems have given those plans a less-than- stellar reputation. They basically have the same disadvantages as the private insurance the working population must subscribe to and are run by the same companies. Some of the disadvantages are:

–     There is a high out-of-pocket maximum, meaning you must pay some of the bill each time there is a doctor visit, test, and service received. There may be multiple copays for the same issue.

–     There is a constant need for referrals and approvals, and care can easily be denied.

–     There is a small network of doctors and hospitals who accept the various Advantage Plans and the one you need may not be one of them.

–     Coverage might not travel with you if on a vacation or business trip.

–     Plan benefits change annually.

–     Free plans are mostly not really free.

Original Medicare has none of these limitations.

Participating doctors aren’t crazy about Medicare Advantage either, and this can affect your treatment. The Plan pays the doctors a set amount of money up front based on the physician’s diagnosis. So, the doctor makes a profit only if you stay under the budget. Otherwise, they wind up losing money. Under these conditions it is not surprising that doctors may skimp on the patient’s care.

The management of Benefytt, whose product Joe is shilling, goes back to the 1990s, when it was signing up consumers to an offshoot of the Affordable Care Act, under the name Health Insurance Innovations. When confronted with illness, clients found that their inexpensive policies covered almost nothing. The company was forced to pay millions in reparations to hundreds of thousands of policy holders. They also had to cease offering these kinds of policies. This doozie morphed itself into what is now known as Benefyyt Technologies.

Benefyyt is underwritten by major insurance companies offering Medicare Advantage Plans, and these players are aggressive and ruthless in the way they do business. Two companies, United Health Group and Humana, together account for over two-fifths of all the policies sold. Most of the ten largest players in this market have been accused of fraud by the U.S. Government or by a whistle blower or have been accused of overbilling by the Inspector General. The average is close to two government fraud charges for each of these companies.

Here are some of the charges:

–     Reflecting the ramped-up marketing tactics of Medicare Advantage insurance companies and their brokers, consumer complaints to the Centers for Medicare and Medicaid Services doubled between 2020 and 2021 from roughly 15,000 to 30,000.

–     There have been many claims, particularly by the very elderly and disabled, of problems with the program that they were misrepresented into buying,

–   Companies regularly deny tens of millions of claims for dubious reasons that were identified by the Inspector General’s office. If these claims were filed with Original Medicare, they would have been accepted. Only after appeals with independent auditors, three-quarters of these claims are approved. But the patient must be savvy enough to know to appeal, which unfortunately most aren’t.

–  About 1.5 million Advantage claims were denied in 2019 despite meeting Medicare coverage rules.

–  According to federal audits eight of the 10 largest insurers have submitted inflated bills. These enhanced diagnoses had a lucrative side effect. They let the insurer collect more money from the federal government’s Medicare Advantage program.

–  Four of the largest players have submitted inflated bills and faced lawsuits alleging their efforts represent fraud.

–  United Health group told their workers to search old medical records for more illnesses repeatedly.

–  Kaiser Permanente called doctors and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found new diagnoses could earn bottles of champagne or a bonus.

–   Elevance Health paid more to doctors who said their patients were sicker.

Audits and investigations by watchdogs show that health insurers inflate their profits by billions of dollars. These companies have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment. As a result, the Advantage Program, devised to help lower health care spending, has instead substantially proved more costly than the Original Medicare it was meant to improve. It has been found that the leading insurance companies earn twice as much from their Medicare Advantage Plans than from any other type of insurance.

Whatever Joe knows about the shlocky product, he hasn’t commented on it. One thing is sure, he is making millions off pushing this terrible program onto the aged and sick.

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“People are really operating in the dark. They should be able to know that if they pick a plan and get heart disease or cancer or other costly conditions, they will be able to get the care they need. Thanks to muddling marketing, too many people can’t be sure.”

--Diane Archer, founder of the health care watchdog, Just Care USA.

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