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Don't Become a Medicare Advantage Horror Story

ginny
10.11.19 04:56 PM Comment(s)

Don't Become a Medicare Advantage Horror Story

Let’s face it.  We have all heard Medicare Advantage horror stories.  There is always a “friend of a friend” that got stuck with a huge medical bill because of their Medicare Advantage plan.  Despite these stories, around one-third of all Medicare recipients are on a Medicare Advantage plan.  That number is expected to grow to 40% in the next couple of years.  People want all the benefits that come with the private alternative to original Medicare and just hope they don’t become one of those horror stories. 


Why are there horror stories?


There is no shortage of news articles about people who have been left holding huge bills by Medicare Advantage Plans.  I have read as many of them as I can find in preparation for writing this article and have identified what went wrong in each of these horror stories.  It always comes down to choosing the wrong plan.  In every instance there was another Medicare Advantage Plan available that would have worked. 


Avoiding the five biggest Medicare Advantage mistakes


Mistake #1 - Choosing an HMO

This is by far the number one reason for people getting stuck with medical bills.  When individuals are evaluating plans, the HMOs always look the most attractive.  They are usually the plans with a lot of $0s.  No premium.  No drug deductible.  No cost doctor’s visits.  No cost this and no cost that.  What too many people who are choosing a plan without any guidance for a professional don’t understand is that with an HMO you are either in network or you don’t have insurance.  Sure, you have out of network emergency coverage.  But the insurance company gets to determine if it truly was an emergency.  If you are not admitted, it probably wasn’t an emergency according to many insurance companies.  And if you are admitted and the hospital is not in network, you don’t have any coverage.  Many people make the mistake of believing they have original Medicare to back up the Medicare Advantage.  They believe that if the Advantage doesn’t pay that original Medicare will kick in.  This is never the case.  A Medicare Advantage plan is “another way to get your Medicare benefits”.  You either have Original Medicare or You have a Medicare Advantage Plan.  You never have both.   Always choose a PPO, PFFS, or MSP as your Medicare Advantage Plan. 


Mistake #2 - Not purchasing a separate hospital indemnity plan

Almost every Medicare Advantage plan has a per day deductible that is in the hundreds for hospital admissions.  Most run around $250 to $350 per day for a set number of days, usually 5 to 7 days.  If you are still in the hospital after that set number of days, the plan pays 100% and your cost share drops to $0.  Unfortunately, this is a co-payment and not a deductible.  This means you pay it for each and every separate hospital admission, no matter how many times a year you are admitted.  A hospital indemnity plan covers a set dollar amount for a set number of days in the hospital.  If your Medicare Advantage Plan has an inpatient hospital co-payment of $275 per day for the first five days, you need to purchase a hospital indemnity plan that covers $275 for five days.  Most hospital indemnity plans cost between $25 and $40 a month.


Mistake #3 – Not checking your estimated drug out of pocket cost

The only thing that Medicare requires of a Part D plan is that it covers two separate drugs in five categories, has a deductible that doesn’t exceed that year’s maximum, and that your average cost share doesn’t exceed 25%.  That’s it!  Beyond that the insurance companies decide each year what drugs they are going to over and on what pricing tier they are going to put them.  You might not realize that the drug you pay a $10 copayment has a retail cost of $1,591 a month.   If the plan you chose doesn’t cover it, you have a problem.  Far too many people assume that “it’s a common drug so of course the plan is going to cover it”.  A popular plan chose to drop Metformin, the most common diabetic drug, from their formulary a couple of years ago.  Never assume that your drug is covered or will continue to be covered in the next plan year.  Check your drugs every year in a Medicare Plan Finder that gives drug estimates, like the one found on our website here.  


Mistake #4 – Not checking hospital networks

Medicare Advantage Plan contracts are negotiated every year.  Hospitals go in and out of networks.  I received an email last year that a hospital in an area where I had several clients had dropped the most popular plan in that county.   I got this email December 1st.  Medicare Open Enrollment ends on December 7th.  I had to scramble to contact all my clients in that county and get them moved to a different plan.  People know to check their doctors, but too often assume that the hospital takes all the plans.  This is just not true.  There is a very popular hospital in Florida that doesn’t take any Medicare Advantage Plans.  Always check to make sure your hospital is in the plan you choose and check again for the following year during Medicare Open Enrollment.  This leads to the last and final mistake that far too many people make.


Mistake #5 – Going it alone

According to a recent report 70% of all Medicare Advantage members are house accounts.  This means they signed up for their plan on the government site or directly with the carrier and do not have an agent.  In the above mentions situation with the hospital leaving the network, I was able to protect my clients.  But what happened to the folks in that county, on that plan, that didn’t have an agent protecting them?  Did any of them become one of those “Medicare Advantage Horror Stories”?  Signing up directly with the plan gains you nothing.  You buy the exact same plan and pay the exact same premium (if there is one).  There is no “savings” going to the plan directly.  However, you lose a lot.  Medicare agents go through required training every year on the Medicare changes that will take effect the following year.  They also must recertify every year with each insurance carrier they have contracts with for that companies’ new plans and formularies.  You have your agent’s cell phone number.  You never have to call the plan’s call center unless you want to.  Your agent can help you with things like tier exemptions and co-payment audits.  And best of all, in most states, they cost you nothing.  They are paid by the carriers, not by you, although they work for you.  None of the folks in the horror story articles I read had an agent.  They all made the mistake of going it along. 


Don’t make these five mistakes, you should avoid becoming a Medicare Advantage horror story.  Medicare Advantage Plans are growing in popularity every year as Medicare Supplements become too costly for aging baby boomers to afford.  You can research the plans in your county on our plan finder here.  I can also help you avoid mistake #5 by becoming your agent.  You can reach me on my cell phone at (912) 321-9040