A fine mess for Medicare and ultimately us.

bobcat

bobcat

Well-known Member
Location
Northern Calif
I had wondered why Medicare Advantage plans could offer benefits such as vision, dental, hearing, and caps on spending that original Medicare doesn't, and in addition, allow for private insurance companies to make a profit. Why couldn't original Medicare offer those benefits instead of paying the money to a private business who is doing it and still making a sizable profit?

I stumbled onto the back story, and it goes like this: Medicare doles out an estimated 22 percent more for MA enrollees than it would spend if those beneficiaries were enrolled in original Medicare, a difference that translates into a projected $83 billion in 2024.

The relatively higher payments to MA plans are subsidized by the taxpayers and beneficiaries who fund the Medicare program. Higher MA spending increases Part B premiums for all beneficiaries (including those in original Medicare who do not have access to the supplemental benefits offered by MA plans).

Originally the plan was to pay MA plans 95% of Medicare premiums, but due to complex factors, it has resulted in paying them 122%, so the rates had to be increased to pay for it. Now they can't reduce the payments because it would result in these private companies cutting benefits to all those enrolled in MA plans which is over half of all Medicare recipients.

Clearly, an overhaul is needed, given the situation, but I'm betting it won't happen any time soon. I think it's possible the trend will continue, and eventually Medicare will just be completely in the hands of profit-making companies, and everyone will just pay higher rates to fund it all.

If you want to read up on it, it is here in the MedPak report to congress:
https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch12_MedPAC_Report_To_Congress_SEC.pdf
 

In 2024, the standard monthly premium for Medicare Part B is $174.70, but your premium may be higher depending on your income. You'll pay this premium each month, even if you don't use any Part B-covered services.

In addition, I pay $120 a month for my Medicare Advantage plan. If the MA plans are discontinued l'd have to find a doctor in my location who accepts Medicare. How much more of my flesh do you want?

Plus l'm paying for Long Term Care insurance which is mostly a rip off. And l'm far from being rich.
 

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Teacher Terry said:
They need to get rid of Medicare Advantage as it’s costing us more money and providing less treatment to people.
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I think the main reason why Advantage plans are so popular is because they offer some dental, vision, and hearing benefits, and they put a limit on out-of-pocket costs. Those things are lacking in original Medicare. Unless traditional Medicare can be revised to include those things, it seems unlikely that those on Advantage plans will want to give them up.
 
Olivia said:
In 2024, the standard monthly premium for Medicare Part B is $174.70, but your premium may be higher depending on your income. You'll pay this premium each month, even if you don't use any Part B-covered services.

In addition, I pay $120 a month for my Medicare Advantage plan. If the MA plans are discontinued l'd have to find a doctor in my location who accepts Medicare. How much more of my flesh do you want?

Plus l'm paying for Long Term Care insurance which is mostly a rip off. And l'm far from being rich.
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Maybe I'm misunderstanding your post, but if anyone is on an Advantage plan, the money paid for Part B Medicare is just sent to the Advantage plan, so if they are seeing a doctor, or getting any care under the Advantage plan, then they are using Part B covered services, but just doing it in an indirect way.

So, if you are paying $174 for Part B Medicare, and you are also on an Advantage plan that costs you an additional $120, then you are paying $294 a month for your Advantage plan. If that's the case, that must be one very comprehensive plan.
 
Medicare advantage plans are very heavily marketed. If you live in an area that you can avail yourself of what they offer, folks seem happy with it. If you're like me, to use it let alone the frills, would be a 3 hour drive to get to in network providers. Absurd.

Bobcat, if your information is correct, it isn't much of a surprise to me. More corporate welfare on the backs of taxpayers. When private companies are pulled in the mix of government programs they aren't doing it for any other reason than to make more money.
 
bobcat said:
Maybe I'm misunderstanding your post, but if anyone is on an Advantage plan, the money paid for Part B Medicare is just sent to the Advantage plan, so if they are seeing a doctor, or getting any care under the Advantage plan, then they are using Part B covered services, but just doing it in an indirect way.

So, if you are paying $174 for Part B Medicare, and you are also on an Advantage plan that costs you an additional $120, then you are paying $294 a month for your Advantage plan. If that's the case, that must be one very comprehensive plan.
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I'm on an advantage plan. I pay the standard ~$175 per month for plan B. The advantage plan is no charge. My prescriptions are all covered, it includes an eye exam & $200 towards glasses, it covers some dental work, and it includes $80 per quarter towards over the counter products. I pay a $30 co-pay if I see a specialist. It has a maximum out of pocket cap as well. I may be getting less coverage than the traditional Medicare plan but I don't feel like it. Not sure what I'm missing.
 
Rich said:
I'm on an advantage plan. I pay the standard ~$175 per month for plan B. The advantage plan is no charge. My prescriptions are all covered, it includes an eye exam & $200 towards glasses, it covers some dental work, and it includes $80 per quarter towards over the counter products. I pay a $30 co-pay if I see a specialist. It has a maximum out of pocket cap as well. I may be getting less coverage than the traditional Medicare plan but I don't feel like it. Not sure what I'm missing.
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I think you're right. It can be a very good deal for all the reasons you gave. I guess the perplexing thing to me is why original Medicare doesn't do those things, but they are willing to pay private companies to do it, and make a profit in the process.
 
bobcat said:
I think you're right. It can be a very good deal for all the reasons you gave. I guess the perplexing thing to me is why original Medicare doesn't do those things, but they are willing to pay private companies to do it, and make a profit in the process.
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IMO it was probably a compromise to allow existing insurance companies to continue administering our health insurance instead of hiring an army of government workers to do it.

It does seem like there should be a more efficient way to reduce the administrative overhead while maintaining benefits. I’m amazed at all of the paperwork, telephone surveys and evaluations that my advantage plan requires/offers.

The only reason I have chosen an advantage plan is the reduced upfront costs for monthly premiums. If they eliminate advantage plans or
come up with a new scheme I’ll work with what is available.
 
bobcat said:
I think you're right. It can be a very good deal for all the reasons you gave. I guess the perplexing thing to me is why original Medicare doesn't do those things, but they are willing to pay private companies to do it, and make a profit in the process.
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Probably the private companies have the stronger lobbyists? The lobbyists run this country IMO.
 
Wow! Amazing how there is so much constant agonizing over every single penny that goes to helping USA citizens, while flippantly accepting the provision of billions of USA citizen tax dollars in foreign aid. Israel gets a total amount 30 billion over ten years. Formerly 50 billion over ten years was provided to Afghanistan. How many billions have gone to Ukraine so far? Allocate those same amounts to help needy USA citizens, and all hell breaks loose.
 
It's nothing new and shouldn't be a shock that Medicare forwards money from Part B premiums to your MA plan. That's how it works.

Your MA plan may have additional premiums on top of that depending on its coverage level, exclusions, out of pocket caps, etc. But you don't always get things like dental and vision coverage, and those may require additional premiums.

In my case the PPO MA plan I have is good even if I move out of State, while other HMO MAs (as well as "basket" coverage for Original Medicare supplements and MediGap) are restricted to my State of employment.

To go out shopping on the open insurance market means I'd likely pay more because I'd be turning my back on offerings negotiated by my employer retirement system and "subsidized" by what I paid in for retiree health while working.

Another factor may be how well things are going for insurers in your State with pre-retirement policyholders. Obamacare provides a valuable service but it has hollowed out the market in many States, causing insurers to leave a State or raise premiums on retirees.

There are a lot of moving parts.
 
Radrook said:
Wow! Amazing how there is so much constant agonizing over every single penny that goes to helping USA citizens, while flippantly accepting the provision of billions of USA citizen tax dollars in foreign aid. Israel gets a total amount 30 billion over ten years. Formerly 50 billion over ten years was provided to Afghanistan. How many billions have gone to Ukraine so far? Allocate those same amounts to help needy USA citizens, and all hell breaks loose.
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Sorry. You must have misunderstood the thread.
 
dilettante said:
It's nothing new and shouldn't be a shock that Medicare forwards money from Part B premiums to your MA plan. That's how it works.

Your MA plan may have additional premiums on top of that depending on its coverage level, exclusions, out of pocket caps, etc. But you don't always get things like dental and vision coverage, and those may require additional premiums.

In my case the PPO MA plan I have is good even if I move out of State, while other HMO MAs (as well as "basket" coverage for Original Medicare supplements and MediGap) are restricted to my State of employment.

To go out shopping on the open insurance market means I'd likely pay more because I'd be turning my back on offerings negotiated by my employer retirement system and "subsidized" by what I paid in for retiree health while working.

Another factor may be how well things are going for insurers in your State with pre-retirement policyholders. Obamacare provides a valuable service but it has hollowed out the market in many States, causing insurers to leave a State or raise premiums on retirees.

There are a lot of moving parts.
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Regular Medicare and medigap supplement plans do not restrict you to the state you live in. That’s one of the main reasons for choosing them is that you can use any doctor or facility that accepts Medicare nationwide. Just about everyone accepts Medicare including the most prestigious medical facilities.

I understand why you choose what you do because it’s offered by your employer and is cheaper for you. Employer MA plans tend to be much better than what is offered to the public.
 
Teacher Terry said:
Regular Medicare and medigap supplement plans do not restrict you to the state you live in.
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Not entirely true.

I have the option of going that way as well. It's just that those alternatives would not move with me out of State if I moved. Those are employer-sponsored as well.

But even open market, an insurer doesn't have to carry you if you move out of State. Some plans do, others do not.
 
Olivia said:
In 2024, the standard monthly premium for Medicare Part B is $174.70, but your premium may be higher depending on your income. You'll pay this premium each month, even if you don't use any Part B-covered services.

In addition, I pay $120 a month for my Medicare Advantage plan. If the MA plans are discontinued l'd have to find a doctor in my location who accepts Medicare. How much more of my flesh do you want?

Plus l'm paying for Long Term Care insurance which is mostly a rip off. And l'm far from being rich.
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If straight Medicare paid providers more fairly, more of them would accept medicare patients. Instead, after the peak of the covid pandemic, Medicare lowered compensations from $65 to $45 for a routine visit of at least 10-minutes.

That's according to what I read. I also read that Medicare's billing process is an absolute nightmare, providers wait as long as 6 months for payments, and some are advised they have to wait until the next fiscal year.
 
Murrmurr said:
If straight Medicare paid providers more fairly, more of them would accept medicare patients. Instead, after the peak of the covid pandemic, Medicare lowered compensations from $65 to $45 for a routine visit of at least 10-minutes.

That's according to what I read. I also read that Medicare's billing process is an absolute nightmare, providers wait as long as 6 months for payments, and some are advised they have to wait until the next fiscal year.
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Wow, if that's true, it's a very sad state of affairs. That seems so wrong.
 
dilettante said:
Not entirely true.

I have the option of going that way as well. It's just that those alternatives would not move with me out of State if I moved. Those are employer-sponsored as well.

But even open market, an insurer doesn't have to carry you if you move out of State. Some plans do, others do not.
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Medigap plans are obligated to pay for anything that Medicare approves. They have no choice. So if Medicare pays for someone to use any facility in the country that takes Medicare then the supplement has no choice but to pay their share. I spent a lot of time researching before deciding on regular Medicare versus MA.
 
Teacher Terry said:
Medigap plans are obligated to pay for anything that Medicare approves. They have no choice. So if Medicare pays for someone to use any facility in the country that takes Medicare then the supplement has no choice but to pay their share. I spent a lot of time researching before deciding on regular Medicare versus MA.
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Perhaps you are thinking of travel.

But insurers are not compelled to make the same plan available in every US State. I asked about this specifically, and was told that the MA plan I have now is the only one that would "move" with me to another State.

Nothing says I couldn't go to the open market, but costs would likely be higher.
 
dilettante said:
Perhaps you are thinking of travel.

But insurers are not compelled to make the same plan available in every US State. I asked about this specifically, and was told that the MA plan I have now is the only one that would "move" with me to another State.

Nothing says I couldn't go to the open market, but costs would likely be higher.
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We are having a misunderstanding. Medicare and medigap allow you to obtain care in any state. Yes if you move you have to change your medigap plan to one in that state. It’s not a big deal to do that.

Medigap plans increase in price as you age typically depending on if you have an age attained plan, etc. There’s a few variables depending on your state. So the price is different every year anyways.
 
My zero premium BCBS Medicare Advantage plan covers me anywhere.

The difference is in my annual out of pocket expense for in network of $8,850.00/calendar year vs $11,300.00 out of network.

I thought at one point of becoming a snowbird and chose BCBS because they have a strong network along the east coast and Florida.

We each have different needs and there are subtle differences between states so it really makes sense for each of us to do our homework and choose a plan that works best for our own unique situation.
 

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