I have spent the last three weeks sharing with you how I researched available Medicare health and drug plan choices for my 80+ year old mom using the information and documents found on our government’s Medicare Plan Finder and individual insurance company websites. Evaluating Medicare choices is not simply about going with the cheapest plan. Changing from one stand-alone Medicare Part D prescription drug plan to a cheaper one each year (as I have done repeatedly) is a no-brainer since there are no long term consequences. The same cannot be said when contemplating the switch from original Medicare to Medicare Advantage. Evaluating Medicare choices requires careful thought.
In my analysis, I will only be looking at the three choices shown in the figure below. While Choice 2 is not available to my mom, I have left this option in for evaluation of costs. Medicare beneficiaries with other sources of coverage (e.g., employer-sponsored retiree, VA benefits, and/or TriCare) or who quality for low income and/or asset programs taxpayer-subsidized help with costs will find their choices will be different and more complex.
Before evaluating Medicare choices for my mom below, I need to make clear that I will not be showing the cost calculations for the three Medicare Advantage HMO plans available to my mom for a number of reasons itemized below:
- My mom’s family doctor is not in any of the HMO networks and I do not plan on making her change from the only doctor she likes and trusts.
- I do not like the very restricted HMO doctor networks because they do not allow the Medicare beneficiary to seek medical care at the “best” quality facilities and doctors. While our healthcare system would like you to think that all doctors and medical facilities are created equal, the reality is that they are NOT. The world-class medical centers in the United States (e.g., Cleveland Clinic, Mayo Clinics, Memorial Sloan Kettering Cancer Center) deliver care that is much better than what is locally available to most Americans and being an HMO member means that my mom would not have the option of getting care outside the limited HMO network without paying full price for the care.
- I do not expect my 80+ year old mom to make sure that every professional in a given medical facility accepts her HMO coverage every time she seeks care. The financial ramifications for going out-of-network are too great.
- I do not like that a primary care physician’s approval is needed to seek care from a specialist. The primary care physician might be pressured to limit care for financial (income and profit) reasons. It is hard for me to forget the HMO horror stories from the 1990s.
If my mom lived in the few counties around the country where HMO presence is extensive and well-organized (e.g., Miami-Dade in Florida and Los Angeles in California), then I would have looked at them as potential Medicare Advantage options.
I will be evaluating Medicare choices for my mom into two part—cost and other considerations.
Evaluating Medicare Choices—Cost Considerations
I have taken the cost information from our government’s Medicare Fund Finder and created the summary spreadsheet shown below. I have not included the costs from any of the HMOs available to my mom for the reasons cited above.
In this spreadsheet evaluating Medicare choices for my mom, I have summarized all the important cost information. I have itemized all my mom’s potential premium costs along with her estimated drug costs (using her current drug list) to come with Total Known Costs for each of the choices. The Part D costs represent the lowest drug cost outlet (either a retail pharmacy or mail order) and the benefits are either provided by my mom’s cheapest stand-alone Part D prescription drug plan (Wellcare Classic) or as part of the Medicare Advantage plan (MA-PD). The Potential Health Plan Out-of-Pocket Costs (for Medicare Part A and Part B services) will vary depending on my mom’s healthcare needs next year from $0 (original Medicare + a Medigap F policy) to as much as $10,000 with the Medicare Advantage plans.
As you can see, her current situation (highlighted in blue above) has the highest Total Known Cost because of the high cost of the Medigap F policy. In Medigap policies (unlike in Medicare or Medicare Advantage plans), the insurance companies are free to increase premiums as a person ages. Therefore, for a Medigap policy, a 65 year old will pay less than my mom, who is 80+ years old.
From a pure cost standpoint, the spreadsheet evaluating Medicare choices for my mom tells me that Choice 1 (blue) versus Choice 3 (green) can be summarized as follows:
Either paying a maximum of about $1700 extra (based on Total Known Costs) to stay with original Medicare (Choice 1 in blue above) for a zero risk of incurring Medicare Part A and Part B healthcare spending
Risking $6700 (in network) or $10,000 (in and out of network) in potential Medicare Part A and Part B health spending by switching to a Medicare Advantage plan (Choice 3 in green above) if my mom gets sick and needs costly healthcare next year.
Remember that my mom’s $1700 extra cost for Choice 1 DECREASES with every copay and coinsurance payment she would have to make under a Medicare Advantage plan.
While my mom could reduce her Medigap premium cost (in Choice 1) by getting a less comprehensive Medigap policy (A, B, C, D, F-high deductible, G, K, L, M, or N), my initial evaluation of this option tells me that the premium savings are not worth introducing financial accounting (and stress) that my mom is incapable of handling. I will not be discussing this option in this blog post.
Before I leave this section on evaluating Medicare choices for cost considerations, I want you to look at the difference between Choice 2 ( the MA plan shown in orange) and Choice 3 (the MA-PD plans shown in blue) drug costs. The insurance companies have jacked up the prices for the prescription drug part of the MA-PD plans (Choice 3) compared to the drug costs in the lowest cost, stand-alone Part D prescription drug plan (PDP) available to my mom (in Choices 1 and 2). If Medicare beneficiaries choosing Medicare Advantage plans had been allowed to buy the MA plan + a stand-alone Part D plan, then an extra $600 could have gone into their pocket rather than the insurance company’s. With this special interest regulation forbidding the purchase of Choice 2 above, the insurance companies can market their MA-PD plans on “lower” health plan premiums while charging higher drug plan premiums than they should.
Other Important Considerations
Loss of Medigap Guaranteed Issue Rights
If my mom switches to a Medicare Advantage plan for 12 months or more, she will lose her Medigap policy guaranteed issue rights. This means that if she wants to return to original Medicare the year after having Medicare Advantage, her health situation will be used to determine her Medigap premium cost. My mom could even be denied Medigap coverage if she needs costly medical care. If Medigap premium costs become unaffordable, then my mom will be forced to stay with a Medicare Advantage plan managed by a for-profit business with potential out-of-pocket expenses of $6700-$10,000 every year. Switching between original Medicare + Medigap and Medicare Advantage is NOT the two-way street commission-paid brokers selling Medicare Advantage plans (and our government) want you to think it is. Switching to a Medicare Advantage plan would be a one-way street for my 80+ year old mom if she got sick. The number and quality of the Medicare Advantage plans where my mom lives are too few to risk going down this one-way street.
Dealing with a For-Profit Insurance Company In Medicare Advantage
I do not expect my 80+ year old mom to have to fight for or be denied expensive treatment, be subjected to many prior authorization rules, appeal processes, and endure limits on care that are defined by a for-profit private business. This is the reality of having Medicare benefits delivered through a Medicare Advantage plan. If my mom got sick, the managed care environment calls for aggressive Medicare beneficiary communication skills to get the “best” care. My mom (even when she is healthy) is incapable of mounting this type of campaign. Furthermore, I would not want her to have to endure the stress associated with it.
Evaluating Medicare Choices: LIMITED Dental, Vision, and Hearing Coverage
The fact that the Medicare Advantage plans have limited dental, vision, and hearing coverage is not a big factor in evaluation Medicare choices for my mom. The value of this coverage is minimal and consumers should not buy Medicare Advantage plans just to get this coverage. This limited coverage is cheap for the insurance companies to add–I have even see this coverage in some Medigap policies. The Anthem MediBlue Access plan above offers an optional “comprehensive” dental benefit that covers $500 in dental work for $216 annually ($18/month). This is a very expensive premium for so little coverage. A for-profit business never gives you something for nothing!
Evaluating Medicare Choices for Mom–The Final Decision
I do not agree with mixing money (for-profit, private healthcare businesses) with the delivery of healthcare to Americans because it pits the needs of the patient (and taxpayer) against the needs (and wants) of the for-profit businesses. The patient (and taxpayer) ALWAYS loses under this situation. I have tried to objectively evaluate the Medicare choices (i.e., the public original Medicare and the private Medicare Advantage) available to my mom.
In evaluating Medicare choices for my mom, the final decision rests on the following considerations. Does a maximum $1700 savings in Total Known Costs (assuming my 80+ year old mom uses no healthcare services except preventive screenings in 2017) gained in switching to a Medicare Advantage plan warrant the following risks if my mom got sick and needed costly health care next year? The answers to this question are spelled out below:
- The risk of incurring up to $6700-$10,000 in unexpected medical costs. The answer is NO! My mom can still financially handle the $1700 in extra cost largely incurred for her Medigap F policy.
- The risk of losing her Medigap guaranteed issue rights under original Medicare. The answer is NO! If my mom wanted to return to original Medicare, her former Choice 1 (in blue above) would no longer be available. If she is denied Medigap coverage (or if it is exhorbitantly priced), then original Medicare (without ANY catastrophic coverage) would be potentially more expensive than the Medicare Advantage plans she would now be stuck in.
- The risk of being stuck with very limited (and possibly low quality) Medicare Advantage plan choices. The answer is NO!
- The risk of being stuck in a healthcare delivery system where treatment options may put income and profits of a private for-profit company AHEAD of what is best for my mom. The answer is NO!
- The risk (and stress) of dealing with all the for-profit private company’s efforts to limit coverage and wring out every last dollar from my mom. The answer is NO!
Based on the evaluation given above, I am advising my mom to stay with original Medicare, keeping her Medigap F policy, and signing up with the cheapest stand-alone Part D prescription drug plan (Wellcare Classic). When my mom visits me next year (I live 1000 miles away), I will not have to worry that health care for any unexpected sickness won’t be covered.
Where To Get Unbiased Medicare Plan Advice
BB’s Medicare Open Enrollment: Where Do I Begin –how to navigate the government’s Medicare Plan Finder website
BB’s Medicare Open Enrollment: Stand-Alone Prescription Drug Plans –assuming mom stayed with original Medicare
Zeroing In On The Cheapest Medicare Part D Plan –assuming mom stayed with original Medicare
BB’s Medicare Open Enrollment: Medicare Health Plan Choices –BB collects information about the Medicare Advantage plans available to her mom