South Bend Tribune: Patrica Griffey says… “Don’t do away with Medicare Advantage.”

“Despite losing their super majority in the Senate, congressional Democrats remain confident that they’ll be able to approve a final health reform bill in the near future. The tactics for doing so are up for debate, but leaders in both the House and Senate agree on many major provisions of the reform package, including proposed changes to the Medicare Advantage program.”

“That’s bad news for the 11 million seniors currently enrolled in Medicare Advantage, as reform could make their lives a lot more complicated. Congress is set to cut this popular program by $172 billion over the next decade and use the proceeds to fund other provisions of health care reform. As a result, this sizable population of Medicare patients could lose coverage — and unwittingly drive up the cost of health care for everyone else.”

This may indeed be bad news for 11 million seniors, but there is some light at the end of this tunnel.

We have already witnessed some major cuts over the past two years in the Medicare Advantage program. As a result, many plans have already raised rates. We have seen many plans go from zero premium to $100 per month premium.

With the advent of Medicare Supplement Plan N and Plan M, many seniors will now have the option of choosing a plan that provides all of the benefits of a regular medicare supplement, at a reduced cost. For folks that can afford to pay nothing, this is indeed a negative trend, but for folks who can manage a small premium, this may actually turn out to be a blessing in disguise.

Get a Medicare Supplement Plan N quote now…

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The Associated Press: “Millions of seniors who signed up for popular private health plans through Medicare are facing sharp premium increases this year — another sign that spiraling costs are a problem even for those with solid insurance. A study to be released Friday … found that premiums for Medicare Advantage plans offering medical and prescription drug coverage jumped 14.2 percent on average in 2010, after an increase of only 5.2 percent the previous year. Some 8.5 million elderly and disabled Americans are in the plans, which provide more comprehensive coverage than traditional Medicare.” The study, done by Avalere Health, a data analysis firm, “found that the average monthly Medicare Advantage premium for 2010 is $39.61, representing an increase of nearly $5 a month from the previous year. That compares with a rise of less than $1.75 a month in 2009″ (Alonso-Zaldivar, 2/19).

This news only affects you of course if you have a Medicare Advantage plan. If you have a Medicare Supplement, it works alongside of Medicare, not instead of Medicare like 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.

Tony Jackson is an Expert Author and has written widely about Medicare Supplements and Medicare Advantage.

I have spoken with many people who believe that they may enroll in a Medicare Advantage Plan and keep their Medicare Supplement Plan. This simply is not the case. Medicare Advantage Plans work in place of Original Medicare, and Medigap Plans only work with Original Medicare.

If you have Original Medicare PLUS a Medicare Supplement Policy and you are planning to switch to a Medicare Advantage Plan, you cannot keep your Medigap plan to pay for deductibles, copayments or coinsurance.

If you are considering canceling your Medicare Supplement, you should talk to a qualified professional or your State Health Insurance Assistance Program before you do. The fact is, you may not be able to get it back.

If you are already enrolled in a Medicare Advantage Plan, it is illegal for anyone to sell you a Medigap policy unless you are switching back to Original Medicare.

When you qualify for Medicare, you get to choose how you receive your health and prescription drug coverage. Following are a brief description of your coverage choices.

Original Medicare

• Run by the Federal government
• Provides you Part A and Part B coverage
• You can join a Medicare Prescription Drug Plan to add coverage
• You can buy a Medigap (Medicare Supplement Plan sold by private insurance companies) to help fill the gaps in Part A and Part B coverage (like coinsurance, copayments, and deductibles.

Medicare Advantage Plans (like an HMO or PPO)

• Run by private insurance companies approved by Medicare.
• Provide your Part A and Part B coverage, but can charge different amounts for certain services. May offer extra coverage and prescription drug coverage for an extra cost. Costs for items and services vary by plan.
• If you want drug coverage, you must get it through your plan (in most cases).
• You don’t need a Medigap policy.

Other Medicare Health Plans

• Plans that aren’t Medicare Advantage Plans but are still part of Medicare.
• Include Medicare Cost Plans, Demonstration/Pilot Programs, and Programs of All Inclusive Care for the Elderly (PACE).
• Some plans provide Part A and Part B coverage, and some also provide prescription drug coverage (Part D).

If you have other health and/or prescription drug coverage from a former or current employer or union, you may have other coverage choices. This coverage may affect which Medicare coverage choice is best for you.

Source: 2009 Choosing a Medigap Policy. A Guide to Health Insurance for People with Medicare