In February 2024 this website crashed for no apparent reason. Despite using professionals at GoDaddy.com it was impossible to restore anything after October 2021 (over 100 posts). I do have many of those post in draft form (no final edit or photos) and I have decided to repost them in that manner. I apologize for typos and other errors. How do I feel about losing all of my original work? Life goes on.
Years ago, we gave up cable TV and never looked back. We have existed quite nicely with DVDs from the library, streaming services, and antenna TV.
On Thanksgiving Friday, the family and I were re-experiencing our all-time favorite holiday movie, “A Christmas Story.” Ralphie was cleverly placing an ad for a Red Ryder rifle (the one with the thing in the stock that tells time) in his mother’s “Look” magazine when something horrible happened. The picture froze, and we sat in disbelief, staring at a buffering circle that went around and around our TV screen.
We said a few choice words, but that didn’t help. We unplugged and replugged the modem and the router, but that didn’t help. We even checked the outage map, but it said that all service areas were green. Things weren’t good in Kunaland. We were suffering from the withdrawal of Christmas cheer. Sucked away by a spinning circle that denied us knowledge of Ralphie’s fate. OK, we knew that he was getting the rifle because we have watched this movie every year for decades, but it was devastating nonetheless.
As I write this missive, our Internet is still out, and a Comcast technician is trying to beat the setting sun as he uncoils a giant spool of coaxial cable to reconnect us to the cyber world.
We are not big TV watchers here in Kunaland, but deprivation is a powerful motivator. I have found myself frantically searching terrestrial television stations for reruns of “New Gen” and “The Dick Van Dike Show.” Thankfully, I have been successful in my endeavors, but at a high cost. We are in open enrollment for Medicare, and at least 50% of the commercials have focused on getting me to dial various 1-800 numbers because “I could be missing out.” Aging sports figures and ancient movie stars beckon me. Slick commercials of happy seniors urge me to pick up the phone and dial NOW!
The following post has been researched but still represents my opinion. If you are about to start Medicare or are on Medicare, you may find these writings helpful. Naturally, do your own research and come up with your own conclusions.
Medicare was established in 1965 by the then president, Lyndon Johnson, as part of his Great Society Program. Before Medicare, only 50% of those 65 and over had health insurance, and very few had surgery or outpatient coverage. The current US life expectancy is 77 years. That is a long time to be without health insurance. Medicare is life-giving, but it isn’t comprehensive.
The original Medicare consisted of Part A and Part B. Part A is for hospitalization and has a deductible. The way that the deductible works can be confusing. It involves a set deduction for every 60 days of hospitalization and a convoluted charge for skilled nursing care, which can add up. Part B involves outpatient treatment, from doctor’s visits to diagnostics. The recipient is responsible for 20% of all outpatient charges, with no limit. That is not a big deal if you see your doctor once a year, but it could be catastrophic if you have to have regular expensive tests, for instance, MRI scans. Treatments like chemotherapy and dialysis are also covered under this 20% rule.
In 2006, Medicare Part D was added as an option for Medicare recipients. Part D covers prescription medications, and its payout is also very convoluted, having 4 phases: a deductible phase, a co-pay phase, a donut hole phase, and a catastrophic phase. Most people are concerned with the donut hole phase, where their cash outlay for medications can increase dramatically.
You will enter the donut hole when the total cost of all prescribed medications exceeds $5040 (including what insurance pays). When your total out-of-pocket medication bills (NOT counting what your insurance paid) reach $7,400, you leave the donut hole and enter catastrophic coverage. It is important to note that the $7,400 is the amount you paid, not your insurance, which can greatly burden financially strapped seniors. However, Part D is better than what was available before 2006, which was nothing.
Most seniors who stay with traditional Medicare will get private supplemental insurance for Part A and B (often called Medigap insurance). This comes in various “flavors,” but many choose Plans G or N. This will be an additional monthly cost beyond the normal Medicare B premium but will cover most of the charges that Part A and B miss. The government sets Medigap coverage, so a Plan G from Company A will be identical to Company B. However, companies set their monthly premium. You may find an unknown company with a low premium for Medigap insurance. They may do this to attract you but raise their rates more significantly than other carriers. It is best to do a little research or use a broker to sort out a company’s history so you can determine its pricing behavior.
Part D requires its own supplemental policy. In 2024, some Part D plans will have a zero monthly premium. Part D plans can change yearly, so reviewing the documentation from your Part D insurer is important. With Part D insurance, you are still subject to the donut hole and other limitations.
What are the advantages of traditional Medicare?
-You can go to any doctor who accepts Medicare (most do).
-You can go to any hospital that accepts Medicare (most do).
-If your doctor thinks a test, treatment, or hospitalization is necessary, and if it meets Medicare guidelines, it will be covered, no questions asked.
-You can see any specialist without your primary’s approval or referral.
-Precertification for procedures is not necessary.
What are the disadvantages of traditional Medicare?
If you are healthy, Medigap policies can be more expensive than Medicare Part C, also called Medicare Advantage.
In 1997, Medicare developed Medicare Part C, originally called Medicare Choice and now called Medicare Advantage. Medicare Advantage is NOT Medicare. If you choose Part C, you leave Medicare and join a private insurance group. Your care will be managed like an HMO (or sometimes like a PPO).
Advantages of Medicare Advantage.
-You may have a low or no monthly Advantage premium (in addition, you still need to pay the standard Medicare Part B monthly premium).
-You will automatically get Medicare Part D, usually at no additional cost.
-You will possibly get many perks, such as:
Possible free gym membership.
Possible free dental checkups with selected dentists.
Possible additional dental coverage.
Free eye exams with selected eye clinics.
Possible allowance to pay for a portion of your eyeglasses.
Possible help with hearing aid costs.
Possible monies for over-the-counter medical items.
Disadvantages of Medicare Advantage programs
-You are limited to doctors who are members of your Advantage plan
-Those doctors may withdraw from your plan at any time.
-Your coverage is region-specific. If you are traveling outside your hometown, you may not be covered.
-Your hospitals are limited to those that accept your Advantage plan.
-Seeing a specialist requires a referral.
-In practical terms, your care can be determined by a third party who may be less qualified than your doctor. In some cases, your care is determined by a computer algorithm (AI).
-You may be denied care, even if your doctor feels it is medically necessary.
-Many denials are reversed, but the process can be so arduous that you may not have the energy to constantly fight for what you need.
-There are reports of patients being denied necessary but expensive care.
-There are reports of patients having to wait long periods for life-saving treatments, for instance, expensive cancer treatments.
-Premier hospital systems, like Mayo Clinic, do not accept Medicare Advantage plans (but do accept traditional Medicare).
-There are reports of patients being denied appropriate skilled nursing care for the needed time.
-Advantage programs can change their doctors, hospitals, and coverage annually. You are responsible for determining if your treatment team and facility are still part of your plan yearly.
Why do brokers sometimes push patients toward Medicare Part C (Medicare Advantage)?
I can’t look into brokers’ minds, but I can list some documented facts.
-The broker receives a significant commission every time a patient is placed into an Advantage program. This commission is much larger than what they would make by referring someone to traditional Medicare.
-There are undocumented reports that some Medicare Advantage companies offer brokers all sorts of additional perks that range from special trips, free training programs, and cash to market their businesses.
Why do private insurance companies like Medicare Advantage?
Again, I must speculate.
-It is a huge profit center for them. They potentially gain millions of clients for whom the federal government pays a monthly premium. In addition, some Advantage programs have a separate premium that the client pays.
Why does the government like Medicare Advantage?
-Technically, Medicare is neutral on the topic. However, if you look at the Medicare website, it is easy to believe that Advantage programs are part of Medicare (they are not).
-By pairing the word “Medicare” with “Advantage,” there is a clear suggestion that these programs are part of Medicare, yet better than traditional Medicare. Why would the government allow this when it is not true? If I were making Rolex watches, would I allow a knockoff company to market an inferior watch and name it Rolex Deluxe?
-Medicare Advantage was supposed to save the government money by using state-of-the-art models for delivering care. It was supposed to provide care at the same or higher level than traditional Medicare. It does neither, as it costs the government more than traditional Medicare, and many reports say it delivers poorer care.
Why would your pension plan want to change you to an Advantage plan from traditional Medicare?
-Government organizations, municipalities, and other groups offering pension plans may push Medicare Advantage as it eliminates their obligation to pay for Medigap insurance policies for their retirees (which can be stipulated in pension contracts).
How can insurance companies profit when they give patients perks and pay brokers big commissions?
Simple economics: take in more money than you pay out. The more you do this, the more money you make. Free dental exams are inexpensive, but a long stay in a skilled nursing facility is very expensive. Limit the latter (even if deemed medically necessary), and you increase your bottom line. There are documented cases of this. Insurance companies can squeeze profit from the other end by offering ridiculously low reimbursements to providers and care facilities. There are cases of rural hospitals closing their doors because they couldn’t stay afloat due to the poor reimbursement they receive from Medicare Advantage companies. There are also cases of hospital chains dropping Advantage clients as they lost too much money providing care for them.
As a physician, I have had some experiences with managed care. Many HMOs offered such poor reimbursement that my group refused to join them. Still, I could cite numerous examples where endless hours were spent trying to get care for a patient. Our office had a dedicated staff person whose job was to fight for medication coverage that insurance companies denied for often ridiculous reasons. These cases could return to the provider, forcing us to battle with an insurance reviewer. How many doctors can spend the time to do this? Advantage must understand this quandary.
I remember a case where I had treated a patient with severe depression with several antidepressants, with no success. I switched him to venlafaxine, and he had a significant positive response. Unfortunately, his insurance plan’s formulary did not cover that medication. Our office spent an enormous amount of time trying to get it approved, and it finally ended in a doctor-to-doctor peer review. After being placed on hold for a long time, I was connected to the reviewer. The smug MD on the other end of my phone call asked endless questions about the patient. I explained his past treatment failures, his amazing response to venlafaxine, his need for long-term treatment, the fact that he had a job to keep and a family to support… and more. I spent 45 minutes talking to the reviewer. This was during a day when I had a full schedule of patients. This patient needed to be on meds for at least six months (standard practice), likely longer. Ultimately, the doctor said I was right, and that the patient should be on venlafaxine. He approved TWO WEEKS OF MEDICATION! He told me that I could appeal again if I wanted to extend his treatment. Yes, he was an asshole, but you can see how such systems prevent patients from getting the care that they deserve. On the books, appropriate checks and balances were in place; in reality, the barriers were made impossibly high.
My Personal Story.
Despite being a physician, I found it difficult and confusing to compare Medicare plans comprehensively. Many “balls in the air” occupied my time when I was approaching retirement. Additionally, I was going into retirement as a high-income earner. Everyone must pay monthly for their Medicare Part B (traditional Medicare and Advantage recipients alike). However, if you are a high-income earner before retirement, you must pay additional IRMAA surcharges. This meant that my monthly Medicare Part B payment was pretty hefty. Additionally, I decided to wait until I was 70 before I started to collect Social Security payments, as this would maximize my monthly payout. This meant no Social Security checks for years. I did this for my wife, who is ten years younger than me. She comes from healthy stock, and she likely would outlive me. I wanted to ensure a more comfortable lifestyle for her. Lastly, she owns her own business and has to pay a significant premium for her private health insurance.
I was on a fixed retirement income and was faced with significant outlays for health care so I had to explore cost effective options. I’m pretty healthy, and Advantage programs in my area offered many perks with zero additional premiums (again, you still have to pay the Part B premium on Advantage plans). I use a large medical group (hundreds of doctors), and they as well as my local hospital accepted Advantage insurance. Using a broker, I signed up for a Humana Advantage plan.
My experience with Humana was good. I’m on a couple of cheap generic meds, and they covered them. Additionally, I needed to see a few specialists and also had a short course of physical therapy during the last few years. Humana covered this, too, with co-pays from me. Lastly, I had a simple outpatient surgery, which Humana also covered. I never used the “perks” for a variety of reasons, including laziness on my part.
This year, I decided to change to traditional Medicare despite having a good experience with Humana Advantage. You are probably scratching your head and asking, “Why?” There were three reasons:
- I love to travel around the country in Violet the campervan. In January 2023, I attended a large rally of van dwellers in Quartzite, Arizona, called the RTR. This rally had many seminars, including one that discussed health insurance for seniors. They noted that Nomades on Advantage plans are often not covered when traveling outside their plan’s catchment area. There are exceptions to this rule; for instance, a large plan may have related plans in other regions. However, it can be difficult in an urgent situation to find an affiliated doctor or hospital that may or may not be present at your locale. Using an out-of-network provider or hospital could be extremely expensive for the Nomad. Agents may tell you that emergencies are easily covered when traveling, but that was not the message from the talk’s presenters. This concerned me.
- As the rally was ending, I got a call from my wife. She was having medical issues, and it was eventually discovered that she had a large malignant mass in her pelvic region, which was pressing on a major nerve root. She had standard BCBS insurance, which was a godsend. She saw many specialists from our large group, but they couldn’t help. She then saw a neurosurgeon outside our group, but he felt that her case was too complicated. We then went to a major university hospital and saw another neurosurgeon, who referred us to a third neurosurgeon. Her treatment eventually involved a 7-hour operation at a major university hospital with five specialist surgeons in attendance, including two department chairs (yes, it was that complicated). She spent four days in the ICU, many more days on a general med/surg floor, and then she was transferred to a state-of-the-art rehab hospital. She was hospitalized for around a month in total. Post-hospitalization, she was scheduled for eight weeks of radiation using a very specialized (expensive) machine that used a CT scanner to position every treatment. Additionally, she needed to have a custom leg brace made and she attended many weeks of physical therapy. She got an incredibly high level of care at a top facility with world-class doctors. She was able to go where she needed to go instead of being restricted by her health insurance. If we had to pay out-of-pocket, it would have bankrupted us as the costs were astronomical.
- My brother-in-law needed cardiac surgery, and it was a tricky operation. He could have had it done locally, but he researched and found that the best place in the country for his surgery was at the Cleveland Clinic in Ohio. Their success rates were the highest nationwide. He had regular Medicare, so he was able to go where he wanted to for his complicated surgery.
Examining these three points, I realized I wanted to switch from an Advantage plan to traditional Medicare. It is possible to do this, but there is a glitch. When you initially sign up for Medicare, Medigap plans must accept you. However, after a grace period, if you want to switch from an Advantage plan back to traditional Medicare (and get a Medigap plan), you need to go through an underwriting process. If you are deemed too high of a risk, Medigap insurers can reject you. You are asked many questions, including if you were hospitalized in the last three years or if you had been treated for cancer in the last five years. It is possible that any “yes” answer will prevent you from getting Medigap insurance. There is also a central database that insurers can use that contains detailed patient information. I have heard (not verified) that some Medigap companies will reject you for common problems, like being on more than two blood pressure meds simultaneously.
Changing from an Advantage plan back to traditional Medicare on my own seemed impossible. Letters needed to be sent, plans needed to be canceled, new plans needed to be applied for, and timeframes had to be honored in the complicated way that the government likes to do things. Luckily, I have a good insurance broker who made the transition easy, took all the steps to disenroll me from my Advantage plan, and set me up with a Part D insurance plan and Medigap for Parts A and B.
If I stay healthy, I will pay more while losing the perks offered by my Advantage plan. However, I never used the perks anyway. My dentist of 30 years wasn’t a Humana provider, so I continued to pay her out-of-pocket. I thought about joining a health club but never did. I didn’t even know about some perks, like having an allowance for over-the-counter meds.
If needed, I will have better treatment options with traditional Medicare. Additionally, most Advantage plans have added co-pays and deductions when you utilize more expensive treatments, like hospitalizations or ER visits. If I ever had to seek expensive care, it is likely that regular Medicare would be less expensive overall.
I suggest you use an honest insurance broker who specializes in working with seniors. If your broker pushes you towards an Advantage plan without discussing traditional Medicare, I would find a new one. However, a good broker can make your life much easier as they are well-versed in this very complex topic.
Do I think there are instances where an Advantage plan is better than traditional Medicare? Yes, when the individual can’t afford the costs of paying for a Medigap and Part D premium. That may be a sizable percentage of the retired population. However, I don’t think the extra perks that Advantage programs offer should impact one’s choice. That is like choosing a mechanic because he gives out free car air fresheners.
Although the above is my opinion, I hope it will get you thinking about the best option for you.
Cheers
Mike
