The Truth About Medicare Advantage Plans
Medicare Advantage Plans have gotten a bad rap over the past few years
. One prominent website that sells Medigap plans practically rails against Advantage plans (like HMO's and PPO's). The owner of the site goes so far as to say that Medicare beneficiaries are always better off with Original Medicare (Part A and Part B) than with a Medicare Advantage Plan. Why are some people so vocal in their opposition to these plans? Here are some reasons why I think this is the case.
1. Many unscrupulous agents have sold Medicare Advantage Plans without really considering what was in the best interest of the Medicare beneficiary. Stories have abounded about "grandma" being rolled over into some new plan that did not include her doctor or medication.
I have personally been in the kitchen with Medicare Beneficiaries who were crying, because some fool agent preferred making a commission to helping that person get what the best plan for their situation.
The good news is, Medicare and CMS (the Center for Medicare and Medicaid Services) have clamped down hard on these kinds of activities. The bad news is, there are still a host of agents (and agencies) who are still engaged with this sort of nonsense.
2. Low and Even Zero Plan Premiums Can be Misleading
Many Medicare Advantage Plans have very low or even zero plan premiums. Many folks see this and think that they are getting something for nothing. The truth is however, not that simple. Co-pays, Co-insurance and higher drug costs with many of these plans can actually cost more than premiums for a Medigap policy.
In addition to this, as we have been looking at some of the plans for 2010, there are some plans that have no out of pocket maximum (no stop loss, if you will). If you end up getting really sick with some of these plans, you might be responsible to pay a large sum of money for your share of your medical costs.
3. Restrictions to Networks and Plan Rules
Another gripe often leveled against Medicare Advantage plan is that Medicare Beneficiaries are restricted to seeing only providers that are approved by the plan. In an HMO (Health Maintenance Organization) for example, you must normally choose a Primary Care Physician (PCP) and if you want to see a specialist, you must get a referral from your PCP before you do so.
With all of those "strikes" against Medicare Advantage Plans, perhaps you are expecting me to say, along with that other author I mentioned, that Medicare Advantage Plans are never the right choice for people with Medicare.
That however is not the case. There are many situations we have encountered where it appears at least (in our judgment) that a Medicare Advantage Plans is in the best interest of a client and does provide better protection than Original Medicare (Part A & Part B) alone.
There are many, many, many people who absolutely, positively, under no circumstances, cannot afford to pay a monthly premium (for a Medicare Supplement Policy and or a Prescription Drug Plan).
I am of the opinion that if you CAN afford to pay a premium for Medigap and a Part D Plan (and it does pay to shop around) that you should pay the premiums and be done with it. If you can't afford it however, there may indeed be plans that offer protection over and above Original Medicare (plans for example that provide a comprehensive Maximum Out of Pocket, or MOOP).
Are Medicare Advantage Plans right for everybody? Of course not. Just as there is not one retirement plan, or life insurance plan or long term care plan that is not right for every person, there is simply no way to say that Medicare Advantage is "best" or that a Medigap policy is "best."
It is however, too simplistic to say that Medicare Advantage is never in the best interest of a Medicare Beneficiary. Medicare Advantage Plans may have gotten bad press (for a variety of valid reasons), but these plans, in my opinion are a still a good choice for many people.
The opinions expressed in this post are the personal opinions of Tony Jackson and should not be construed as a sales message or a promotion of any insurance company, policy or plan.
by: Tony Jackson
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