Many people with Medicare opt for a Medicare Advantage plan, a commercial insurance plan that contracts with Medicare to deliver Medicare benefits, because they believe it will save them money over traditional Medicare. But, you could pay more in a Medicare Advantage plan than traditional Medicare.
These days, the Trump Administration makes the commercial Medicare Advantage plans look more enticing than ever. The message is “All the benefits of Medicare and more.” But, what does that really mean and what do you trade away?
It’s not at all clear that you will spend less for your care in a Medicare Advantage plan. According to the Kaiser Family Foundation, average out-of-pocket costs for people with Medicare in 2013 were $5,503 (41% of the average individual’s Social Security annual income.) Kaiser’s analysis does not distinguish between people in traditional Medicare and people in Medicare Advantage plans. The Medicare Advantage plans don’t disclose this data.
Why don’t the Medicare Advantage plans reveal this data? What are they hiding? Are people spending more out-of-pocket than their advertisements suggest? If people are spending as much or more in Medicare Advantage plans as in traditional Medicare, it is hard to believe many people would opt for a Medicare Advantage plan and restrict their access to doctors.
If people are paying less out of pocket in a Medicare Advantage plan than in traditional Medicare, it may be because they are not getting the care they need, delaying or skipping care. They may choose to go without care to avoid paying the deductible and copays. Or, their Medicare Advantage plan may not authorize care they need. Since the data is not available, we don’t know whether the cost of getting care in a Medicare Advantage plan or the health plan’s refusals to cover care is affecting people’s health and well-being.
The data do show that people who need costly services disenroll from Medicare Advantage plans when they can and switch to traditional Medicare at far higher rates than people in good health. Unfortunately, the cost of Medicare supplemental insurance or, in some cases, the lack of access to supplemental coverage, can be a barrier to enrollment in traditional Medicare. Congress needs to fix that as soon as possible.
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