You can’t turn on the TV these days without seeing an ad for some drug you are told you need to talk to your doctor about. Last year, drug companies spent a record amount about on direct-to-consumer advertising in this country: nearly $3.5 billion, ten percent more than the year before.
But insurance companies are spending a ton of money, too, especially to lure Medicare beneficiaries into their so-called Medicare Advantage plans. And for good reason: Medicare Advantage plans are the health insurance industry’s cash cow.
The pitch you hear on TV sounds irresistible. If you enroll in a Medicare Advantage plan, you’ll get more comprehensive coverage than in traditional Medicare and it will cost you less in many cases than a Medicare supplement policy, which helps cover your out-of-pocket expenses.
Having been in the insurance industry for two decades, all I can say is “buyer beware.” You may live to regret enrolling in a Medicare Advantage plan.
Medicare Advantage plans are in the news right now as a result of a lawsuits and also a continuing investigation by the Department of Justice over charges of fraudulent billing practices. Bottom line: many of these companies have been cheating taxpayers out of billions of dollars in various ways for several years. Their shareholders benefit handsomely but the rest of us are getting fleeced.
Last week a big dialysis chain, DaVita, agreed to pay $270 million to settle a lawsuit alleging that doctors in its medical group claimed their patients were sicker than they really were in order to get more money out of a slew of Medicare Advantage plans. That didn’t bother the Medicare Advantage plans because they in turn were able to get more money from the federal government.
UnitedHealthcare, the biggest health insurer and Medicare Advantage company, is also in the news because of a lawsuit. A whistleblower at the company says UnitedHealth claimed told the federal government that many of its enrollees were also sicker than they actually were.
As a result of those and other lawsuits and media reports, the Department of Justice is investigating the business practices of the six largest Medicare Advantage companies—Aetna, Anthem, Centene, Cigna, Humana and UnitedHealth. More precisely, they are looking at those companies’ “risk adjustment practices.” The government pays Medicare Advantage insurers more for sicker patients. Every Medicare Advantage enrollee is given a risk score based on the enrollee’s health. There is ample evidence that insurers have been adjusting those risk scores to get more money, fraudulently, from the government, which, of course, is from you and me.
Not only should you be cautious about dealing with Medicare Advantage companies being sued and investigated, you need to know that, unlike traditional Medicare, there often are a lot of restrictions on which doctors and hospitals you can see under a Medicare Advantage plan. Last week I talked about surprise bills people are getting from health care providers that were no longer in their insurer’s network. That happens to Medicare Advantage enrollees a lot.
Know this, a lot of Medicare Advantage plans have small networks and high deductibles. If you go out of network, even unknowingly, you will be on the hook for a lot of money out of your own pocket. And if you travel to another state and need care, you might not get any coverage from your plan.
And know this, too. Even if you decide to return to traditional Medicare, insurance companies can refuse to sell you a Medicare supplement policy, or Medigap plan. You can always get a Medigap plan if you enroll in traditional Medicare when you’re first eligible. All bets are off if you enroll first in a Medicare Advantage plan.
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How to be ready for the health care industry lie factory
“The crooks already know these tricks; honest men must learn them in self-defense.”
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How to spot the health insurance industry’s favorite Democrats
My former colleagues undoubtedly were cheering when they heard Sen. Michael Bennet (D-Colo.) come to the defense of private health insurers and trash the idea of improving and expanding Medicare to cover all Americans.
Commentary, Health care 01.28.2019
Medicare Advantage: Real Advantage or Scam? You may not know all the facts
“Open enrollment is over and the flood of advertisements for Medicare Advantage plans has ended for another year. I’m happy to report that, once again, I’ve managed to avoid signing up for one of those plans.”