THE YEARLY MEDICARE ADVERTISING BLITZ
It’s bad enough that we are being subjected to a barrage of political ads as the mid-term election approaches. Those of us in the Medicare eligibility pool are also experiencing the yearly lust to enroll by private insurance companies hoping you will switch to a Medicare Advantage plan. Medicare pays them extremely well when people sign up for Advantage plans.
My simple advice is that if you are enrolled in traditional Medicare stay there. Consider switching back to traditional Medicare if you are in an Advantage plan. From October 15 until January 15, 2023 Medicare beneficiaries can switch Medicare plans.
Understanding all of the implications of types of Medicare plans can be difficult. If you look at some of the most important issues, such as cost, then decisions can be easier. Medicare Part A has no cost for most people. In 2023 the standard monthly premium for Medicare Part B will be $164.90 and the annual deductible will be $226.
If you are hospitalized in 2023 you could pay up to $1600 as a deductible. People who have Medicare parts A and B need supplemental coverage because those plans only cover 80% of expenses. They have to purchase a yearly plan that can cost somewhere between $150 and $200 a month.
One of the more ridiculous laws relating to supplemental policies allows private insurers to charge you more if you switch to one of their plans after being enrolled in a Medicare Advantage plan or if you did not enroll when you initially became eligible for Medicare.
Someone enrolled in traditional Medicare and who has a supplemental policy will have 100% coverage for most medical care. They will pay $1978 a year for Part B premiums, about $1920 a year for a supplemental policy that costs $160 a month and they could pay up to $1826 in deductibles.
This means that, in most cases, someone enrolled in traditional Medicare will not pay more than $5724 a year for medical coverage. Let’s look at Medicare Advantage Plans. Most of the private companies that offer them either charge a minimal monthly premium or have no premium costs. An Advantage enrollee also does not have to purchase a supplemental plan.
Many Advantage plans offer different degrees of drug plans, at additional costs, as well as enticements such as gym membership. On the surface, purchasing a Medicare Advantage plan seems like the way to go. You need to dig deeper.
Because Advantage plans are offered by private insurance companies they often require pre-approval for seeing specialists and they require you to only see providers within their network. Traditional Medicare does not require pre-approval and there are no networks.
What this means is that traditional Medicare is portable. No matter where you are in the U.S. you will be able to get medical care from any provider accepting Medicare, which is almost every provider. If you have an Advantage plan they may not pay for care if your primary residence is in one state and you spend part of the year in another state.
Keep in mind the Medicare Advantage was created as a mechanism to privatize Medicare and move the program out of the public sector. This is not what Bernie Sanders and other supporters of Medicare for All are talking about when they talk about moving to universal health care.
Sadly, the push to privatize Medicare is full steam ahead and it may not be long before Medicare is no longer a public program. There are 25 million Medicare Advantage enrollees, or 48% of all Medicare eligible people, and the Advantage program represents 55% of all Medicare spending.
While Advantage plans are enticing because of almost no up-front costs, keep in mind that that have out of pocket limits and deductibles that are generally much higher than traditional Medicare. Depending on the plan, you could pay from $6,700 to $10,000 a year if you end up in the hospital.
And coverage varies depending on whether you use in-network or out-of-network providers. You will never know how much the insurance company will charge you when you get sick until the bills start arriving.
And don’t have an illness that puts you in the hospital in late December and early January of the next year because you will have to pay for two yearly deductibles as well as other out of pocket costs.
Medicare Advantage is a great plan if you never get sick. But you are always gambling with the prospect of having to pay a lot more than the $5724 a year maximum you would pay for traditional Medicare.