AMERICA´S MEDICARE HOAX: AS ALWAYS IT´S, "BUYER BEWARE!"

"No Virginia, Medicare Advantage is NOT your government´s regular Medicare."

Are you ready to hear about one of the largest insurance hoaxes being played on the American public?

If so, let´s take a look at what the previous Republican Congress approved in the 1990´s that has bolstered "for-profit insurance providers" with billions of your tax-payer federal subsidy dollars.

OK, so if you are under 50, this column may not interest you……for now.

On the other hand, if you are over 50, or if you or you have a family member that is approaching retirement age, you may both be interested in this article.

First, let´s just see if you have been doing your home-work for learning about regular Medicare versus Medicare Advantage.

The first question for you is: "Is Medicare Advantage (MA) a public plan like regular Medicare?"

If you answered "yes" and if you were playing Monopoly, you would have to go directly to jail. Therefore, you had better keep reading as you have a whole lot to learn.

Medicare Advantage is a private "for profit" plan from a private insurance provider. The insurance companies purposely chose the name "Medicare Advantage" in order to make any potential customers think that it was regular "government provided Medicare,…..plus some extras".

When an individual, 65 or over chooses Medicare Advantage, they are giving up their regular "public" Medicare. Medicare Advantage is a program that provides similar coverage as Medicare while the US government pays the private insurance providers 14% more than regular Medicare for providing "almost" the same basic services.

Now the insurance provider´s sales personnel say it is just Medicare with some extras such as free aspirin, free Band-Aids, a free blood pressure machine and a free ear thermometer. Some providers also provide a pair of free prescription glasses or a free gym membership. But in reality, they aren´t anywhere near being "free" as they are paid for by large government subsidies, or in other words, our tax payer dollars.

In the current health care reform discussions, the Republicans keep saying how they are so concerned that President Obama´s plan will take money away from Medicare. Obama and the Democrat´s plan will not touch regular Medicare. It will however, stop paying the "extra 14% subsidies to the private health care providers for giving the same basic coverage as regular Medicare".

Actually, it´s really not the same coverage as Medicare. Medicare Advantage is basically a private Health Management Organization (HMO). They can tell you which doctors you can use. (The doctors have to be in their network) They can require that you make a co-payment. Today, they can deny you coverage at any time for any reason. They can drop you as a client and at any time they can put a limit on the dollar amount of your medical coverage. Regular Medicare has none of these restrictions.

Per Joseph Baker, the president of the Medicare Rights Center; "The [original] promise of Medicare Advantage and Medicare HMOs was to save the government money, to save consumers money, all the while providing additional benefits and coordinating care. That promise has been [totally] unfulfilled overall because the plans are overpaid by the federal government at this point."

The reality of what is being discussed as being cut from the Medicare Advantage are the little "goodies" that the plan provides, without telling the participants what the insurance providers are charging for these items.

As a case in point, there is a Medicare Advantage user in Phoenix that is very happy because her plan provides (at no direct cost to her) a so called "free" gym membership in the "Silver Sneakers" club. She makes full use of the daily workout, the gym and the treadmill. Now, under Medicare Advantage, even though most private plans require no additional monthly premiums, the government still pays an average of $849.90 extra per person per month in government subsidies. This same "free" gym membership, which was the main reason for this couple to sign up for Medicare Advantage, would have only cost them a total of $600 per year, or $50 per month.

In other words, the insurance provider now receives an additional $10,199. per year of tax payer dollars for a highly-restricted "Medicare type" program that includes a $600 annual gym membership. This, and the so called "free aspirin, Band-Aids, blood pressure machine and ear thermometer" that come with the program are the items that the health care reform would stop providing via reduced subsidies to the private health care providers.

As previously stated, many Medicare Advantage policies have no premiums. However, most MA plans are restricted and many beneficiaries still pay small monthly fees for added benefits such as dental care. Many also pay fees for each doctor's visit, or co-payments that are as high as 20% of the total medical costs.

Per Senator John D. Rockefeller IV (D-W.Va.): "It's a wasteful, inefficient program and always has been, [Medicare Advantage is] stuffing money into the pockets of private insurers, and it doesn't provide any better benefits to anybody."

President Obama has proposed cutting more than $100 Billion in subsidies for MA over 10 years. But these cuts are being promoted by the opposition and the health care companies as being cuts to retiree´s regular Medicare, which they are not. However, in some of the large retirement communities in Arizona and Florida, the loss of these "extra benefits" is being pushed by the GOP as a reason to be against the total Democratic health care reform plan.

Per Republican Senator, Jon Kyl of Arizona, "Seniors like the choices they now have, and they don't deserve to have them ripped away to help pay for this [reform] bill." Senator Kyl, is a member of the Senate Finance Committee. He made this comment just before voting against the Senate panel's health care reform bill.

The Republicans are going to make as big of a deal as they can out of this issue, especially in those states in the south and south west with large communities of seniors. Obviously Senator Kyl is very concerned as almost 40% of the Medicare beneficiaries in Arizona are already signed up in Medicare Advantage. These seniors are a major political voting force in these states.

With the potential up-coming health care reforms, the insurance industry is currently foreseeing a potential major loss in their future profits. They are already spreading false fears that budget cuts will seriously hurt seniors by increasing their premiums or co-payments and are taking away some benefits. America's Health Insurance Plans (AHIP), an insurance industry trade and lobbying group launched a number of ads in several states with large retirement communities. These ads are citing a projection by the nonpartisan Congressional Budget Office (CBO) that "many seniors will see cuts in benefits." Of course, the ads don´t say that the proposed cuts are not for the regular "government sponsored Medicare".

The AHIP communications director Robert Zirkelbach has stated: "This is a program that more than 11 million seniors currently rely on, and seniors have expressed very high satisfaction with this program and want to be able to keep the coverage. Seniors are going to be shocked when they find out what these cuts are going to mean." However, as expected, Mr. Zirkelbach doesn´t happen to mention that these cuts are only for Medicare Advantage users, NOT for any cuts in regular Medicare coverage.

So why did these seniors originally sign up for Medicare Advantage?

Most of the seniors said they were drawn to the plans because when they turned 65, they were relatively healthy and they rarely had to visit a doctor or a hospital. They had also looked into regular full-coverage plans and the premiums would have been substantially higher if they had bought into the full-coverage supplement plans for traditional Medicare.

Needles to say, the medical insurance sales person probably just said that, "Oh, this is just your regular Medicare coverage with some additional services for only a very small extra premium." I would bet that they did not state that by selecting Medicare Advantage, the seniors would also be dropping their regular Medicare coverage and would be going into a private plan with all its caveats and restrictions such as possible co-pays, restrictions and potential cancellations.

As a demonstration of the possible problems with Medicare Advantage, The Washington Post recently published the following about a Medicare Advantage coverage denial: "Bernie Keegan, 68, was hospitalized in March when he got sick and was throwing up blood. But his [Medicare Advantage] HMO did not cover some of his bloodwork or his doctor's fees, leaving him with hundreds of dollars in medical bills. ´I'm kind of rolling over on my back here like a whipped dog,´ said Keegan, who happens to also direct a nonprofit organization. ´I don't want to fight with insurance companies´ ". Mr. Keegan also has a free gym membership, but he has never used it.

So for all you seniors, or those that are on their way to becoming a senior, this is what you will be facing if you choose Medicare Advantage which will put a private health care provider between you and your doctor.

As always, it´s once again, "Buyer Beware".

Copyright G.Ater 2009

Follow me on Twitter: gater01