Part 1 of a two-part podcast featuring Dr. Ed Weisbart, national board member and Missouri chapter chair of Physicians for a National Health Program, discussing the differences between traditional Medicare and Medicare Advantage plans. Plus, why should we be concerned about the impact of Medicare Advantage plans on the Medicare Trust Fund?
The Disadvantages of Medicare Advantage
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Welcome to Code WACK!, your podcast on America’s broken healthcare system and how Medicare for All could help.
It seems like Medicare has been popping up in the news lately, in good ways and bad! But what’s always true is that our country struggles between treating health care as a public good and treating it as a profit-making venture. This conflict of visions is very apparent when comparing traditional Medicare to Medicare Advantage plans. Dr. Ed Weisbart, a retired family physician, former chief medical officer of Express Scripts and a national board member of Physicians for a National Health Program, is joining us today to talk about the latest attack on Medicare — and what we can do about it.
Q: Welcome to Code WACK!, Dr. Weisbart. So let’s talk about traditional Medicare versus Medicare Advantage. What are the main differences between these that consumers should know about?
Weisbart: So they’re really two entirely different programs. Traditional Medicare is a public program paid for straight through our tax dollars to the Medicare program and then Medicare, traditional Medicare, has relationships with doctors and hospitals and everything so it’s just nice and is clean. Medicare pays the doctors and hospitals.
Medicare Advantage is completely different. The people who have chosen to go into Medicare Advantage, Medicare no longer pays doctors on your behalf. Medicare no longer pays the hospitals on your behalf. Instead, Medicare pays an insurance company, a Medicare Advantage insurance company, Humana, Blue Cross. There’s many of them but they pay the insurance company and then you have what’s very similar to employer-style insurance, and that means that they can tell you which doctors you can and can’t go to. Traditional Medicare doesn’t do that. Medicare Advantage can tell you which hospitals you can and can’t go to. Traditional Medicare doesn’t do that, only Medicare Advantage does that. So, Medicare Advantage, you have a group in between you and Medicare, whose mission is a business mission trying to find a way to make a profit off of you being sick and such. That doesn’t belong in health care.
Q: So it sounds like (it’s) very similar to having private insurance.
Weisbart: It is — except that’s nowhere near as good as traditional Medicare. So really from a consumer’s point of view there’s probably three important things to consider … between traditional Medicare and Medicare Advantage. The first is a difference in coverage, the second is a difference in access, the third would be a difference in cost as a consumer, so the coverage in theory is the same, right? Traditional Medicare and Medicare Advantage plans both cover the same benefit package of what’s medically necessary, although in traditional Medicare you have a lot more doctors and hospitals to pick from. Medicare Advantage plans do cover the same range of benefits, but they get to decide what’s medically necessary and they may make different decisions. They have a business interest in making different decisions so they could take a narrower view of what is actually necessary than traditional Medicare does. The coverage is technically the same, but in real life the coverage for Medicare Advantage is not the same as in traditional Medicare.
The second difference is access, as I was alluding to with traditional Medicare you can go to any doctor or hospital that takes it which is like 93% of adult medicine doctors and you don’t need a referral. You don’t need to ask for permission. You don’t need to get prior authorization. If you want to go to a doctor that’s in Medicare’s network, you can go to that doctor , that’s almost any doctor and hospital, whereas Medicare Advantage, you typically have to get a referral typically from your primary care physician or from the Medicare Advantage plan, or it’s, if you’ve given up your traditional Medicare, and you’ve gone into Medicare Advantage, you want something that’s probably expensive because you’re that sick, you suddenly have to start getting permission and approval. That’s not treating you like an adult. That’s taking away your choice.
But the third difference is the cost difference as a consumer. With traditional Medicare there are copays and deductibles and so people who can afford to do it typically will buy a Medigap policy to take care of the copays and deductibles and if you do that, and you’ve got pretty darn good health insurance with traditional Medicare.
With Medicare Advantage, it’s different. You can’t buy a supplemental policy to go on top of Medicare Advantage. So when Medicare Advantage Plans charge you copays and deductibles, you can’t buy Medigap to cover that. If the Medicare Advantage plan says you’re going to have to pay all the costs for your out of network care, you want to go to the doctors across town instead of this side of town. You’re on vacation in Florida or wherever, and you want to go to the doctor there, and the Medicare Advantage plan says that’s out of network and is not covered, or they’re only going to pay half or what have you, you cannot buy insurance to supplement Medicare Advantage. So, in Medicare Advantage there’s actually a limit to how much it can go. You can’t have more than $7,550 in out of pocket expenses.
That’s a lot of money. There is no limit like it in traditional Medicare because if you buy a supplement, you’ve got almost no out of pocket costs, no matter what’s going on. So the reason people often pick Medicare Advantage if they do is because the premiums are lower than a Medigap supplement, so you can look at a Medicare Advantage plan, look at the low premiums and think ‘I’m indestructible, I’m not going to get sick. I don’t have to worry about if I get sick.’ ‘Well, why are you buying insurance in the first place,’ but they think that. They see the lower premium but they don’t realize that that comes with an exposure to now nearly $8,000 in out of pocket expenses, an exposure that doesn’t exist in traditional Medicare if you buy a supplemental policy, usually a couple couple hundred bucks for the supplemental policy which is not cheap but if you buy that, then you don’t have exposure at all.
The trade off is do I pay the premium for a supplemental policy of maybe a couple 100 bucks a month or do I avoid that but risk if I get sick having thousands and thousands of dollars out of pocket? So Medicare Advantage is a way worse deal.
Q: Wow right. That’s very interesting and we are talking about, you know, the sickest population, the over 65 is among the sickest in the country. Okay, how do the programs differ from a doctor’s perspective?
Weisbart: The differences from a doctor’s perspective are pretty similar to the differences from a patient’s perspective, in the sense that traditional Medicare is really easy to deal with, right, it’s really easy to deal with. If a patient comes in to see you and they have traditional Medicare at the end of the visit, we submit our bill to Medicare, and before too long Medicare pays the bill and there’s very little second guessing. There’s very little denials, very little of any of that stuff. So traditional Medicare from a doctors point of view is great. I can do the work that I need to do. I don’t have to worry about where to send my patient. If I have a patient that needs radiology and Xray needs surgical centers or something done, pretty much all of those places take traditional Medicare and take the supplement so I can send my patients to the place that I think is the best for them.
Medicare Advantage is a whole different thing. (With) Medicare Advantage, you know, they have a game of delaying when they pay you, arguing down how much they’ll pay, saying ‘no, that’s not medically necessary, we’re not going to pay for it. Oh, you sent your patient to that radiologist — not so fast doctor we like this radiologist,’ and you know it’s a nightmare and the doctor may not know which one it is, so the patient goes there and then comes back and has to tell us ‘gosh, doc you sent me to the wrong place,’ well how am I supposed to know? It’s a nightmare. With Medicare Advantage, it’s frankly a nightmare for me and traditional Medicare from a doctor’s perspective is a breeze.
Q: Wow, thank you. In terms of health policy, what are the implications of having two competing programs when it comes to healthcare equity?
Weisbart: So, whenever you set up two different systems that compete against each other and they’re not really comparable, you have a disaster on your hands. So from a health policy perspective what we’ve done is we’ve created one option that’s designed to make profit for private commercial industry, and another enterprise that’s designed to improve the health of people, and as a result the for-profit one, well they want, the Medicare Advantage plans, well they want to find the healthiest people they can. If you’re actually genuinely sick, they don’t want you. It’s called cherry picking. They’re trying to find the healthiest people. If you are actually sick they don’t want you there, that’s called lemon dropping, and then once they’ve got the healthiest group of people, they want to make that group of people look sick. They want to find the more diagnoses, the more crazy things that they can find so that they can charge the government more. They can charge Medicare more, so from a health policy perspective, what we have is the Medicare Advantage plans are literally draining the Medicare Trust Fund.
When you hear the Medicare Trust Fund is in trouble, that’s not because of Medicare, that’s because of Medicare Advantage, so they’re draining the Medicare Trust Fund and when you do that, then of course that means that the premiums that seniors have to pay or Medicare people have to pay for part B, go up. So if somebody’s trying to find more profit in the system, they either have to block your health care which is of course what Medicare Advantage plans are designed to do, or they have to drain more money out of the system by draining the Medicare Trust Fund and resulting in higher premiums. So it’s a terrible idea. It’s a terrible idea.
And we talked about health equity and one of the areas of health equity that’s not fully recognized, I don’t think, is the problem with rural communities. We know that people who are sick are more likely to want to get out of Medicare Advantage once they’ve gotten sick. People in rural communities are twice as likely as people in nonrural communities to want to get out of Medicare Advantage. You go in because like I said the premiums are lower because we’ve so overpaid in Medicare Advantage, that they can afford to throw a few pennies at us for the premiums so the premiums are lower, so you go into it when you’re sick and especially, especially if you’re in an underserved kind of community, a rural community or any other underserved community. That’s not where the Medicare Advantage plans have their networks, because they put their networks in the most profitable areas not the sickest areas.
So, from a policy perspective, it does not accomplish our goals. Traditional Medicare, good-old fashioned Medicare that we’ve had since 1965, that’s done a phenomenal job at controlling the cost of health care, at rescuing seniors from bankruptcy and from poverty, at giving seniors wide choice over their own health care, and at actually making seniors healthier, and frankly, very little of that is true for Medicare Advantage.
Thank you Dr. Ed. Weisbart. Join us next time when we talk about the latest sneak attack on traditional Medicare.
Find more Code WACK! episodes on ProgressiveVoices.com and on the PV App. You can also subscribe to Code WACK! wherever you find your podcasts. This podcast is powered by HEAL California, uplifting the voices of those fighting for health care reform around the country. I’m Brenda Gazzar.
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Thanks so much for the kind comment!