Medicare so-called “Advantage Plans”

Several times each week I get phone calls, from telemarketers pushing Medical Advantage plans, usually early in the morning before I get up. Then there are all the letters from various companies pushing this seductive Medicare Advantage Plan or that one. They tell me of the wonderful benefits I’ll get if I change from my regular Medicare to one of the so-called Advantage plans. They tell me I’ll get dental coverage, vision coverage, hearing coverage, funeral coverage, behavioral health coverage, and “in some cases even free transportation to my clinic visits.” I hang up as soon as they mention Medicare. Why?

As a physician, I know the rest of the story, the part they don’t tell you when they are seducing you, often with the name of a well-known movie star. So, what exactly do they mean when they offer all this “coverage?” The problem is you will also probably not know until you see what they don’t cover when you try to use the insurance. My guess would be no dental implants, limitations on dentures, no cochlear implants, limits on your hearing benefits, limits on your funeral benefits, and a paid trip to your health care provider in “some states” on the third Tuesday of the months beginning with the letter “F.” They will probably pay for teeth cleaning once a year for people with no teeth. Yes, I’m being a little facetious. But I can tell you, what Medicare Advantage plans won’t pay is not funny.

Years ago, there was an elderly man in our hospital for five days. The CEO of the hospital called me in and showed me that the check for the payment from this patient’s Medicare Advantage plan was less than the cost of the stamp to send it.

If a claim is denied, most insurances will allow hospitals or doctors to talk with their claims department, refine the billing codes, and resubmit the bill for payment. With Medicare Advantage plans, there is no renegotiation, no discussion, nothing. You take the few pennies they send you and are supposed to go on providing care for their enrollees.

Under these circumstances, CEOs, the hospital boards, and physicians have only one choice—to refuse elective hospitalizations from Medicare Advantage plan patients. In the city I practiced, there were only five such plans. Elective hospitalizations for all five of the plans were rejected. We knew that emergency department services could not be denied, but most seniors did not know that.

Try explaining this to 90-year-old honest persons whose main goal all their lives has been to follow rules from authoritative entities like hospitals and insurance companies. Two patients with this plan remained at home after being denied elective admission to the hospital and died at home because they didn’t know they could go to the emergency room and be taken care of if not covered.

Moreover, it is extremely difficult to get out of these Medicare Advantage plans. The daughter of one of my patients spent the better part of a day getting her mother out of one of these plans. Your average 90-year-old is not likely to be able to figure out how to unsubscribe from these plans. Sending out the 100-page “Medicare and You” might satisfy some esoteric legal Medicare requirement, but has no practical meaning for most of our elderly.

At the time of these hospital payments of less than a dollar and these unnecessarily dead patients I wondered why anybody would buy these insurance contracts and moreover, who would sell them? This, unfortunately, is a case of follow the money.

According to Lever news, the federal government spent $20.5 billion “overpaying” Humana and other private insurers for the Medicare Advantage plans they manage. The Lever article notes that if it were not for those “over-payments,” Humana would have suffered a nearly $900 million loss in 2022.

“All told, the four major publicly traded health insurance companies that operate Medicare Advantage plans, as well as the insurance lobby America’s Health Insurance Plans, spent nearly $19 million on federal lobbying in the first quarter of 2023, a 66 percent increase from the prior quarter, according to a Lever analysis of data from OpenSecrets.”

Today Medicare advantage plans cover 51 percent of Medicare eligible clients for approximately 30 million people, while 49 percent of seniors are covered by traditional Medicare services. In my experience as a physician, most people are happy with these plans until they face hospitalization. Most of us on Medicare have supplemental policies to cover much of what Medicare does not.

United Healthcare has a web site designed to explain the benefits of their Medicare Advantage plans. They indicate their Medicare advantage plans can offer coverage for dental and vision health items and go on to say that most plans include prescription drug coverage as well as other benefits, such as hearing health and gym memberships. They also offer at home visits.

What I find fascinating about these plans is their advertising budgets. Since I am one of the 49 percent (29 million seniors) who don’t have an “Advantage” plan. As  noted above, I get various Advantage plans calls every weekly.  Are these companies really making 29 million phone calls weekly, or am I just special? If these plans are losing so much money, why are they being so vigorously promoted? Perhaps it has something to do with the extra 20.5 billion they get from the federal government from their “upcoding” profits? For now, I want traditional Medicare and supplemental insurance that will give me a better chance of covering me if I need hospitalization. Who wants an insurance plan that does everything except cover what you need it for the most?

Cheryl Clark, a contributing editor on MedPage reports that two large medical groups in California are abandoning their Medicare Advantage plans.

But Van Gorder said he had no choice. "We are a patient care organization and not a patient denial organization and, in many ways, the model of managed care has always been about denying or delaying care – at least economically. That is why denials, [prior] authorizations and administrative processes have become a very big issue for physicians and hospitals – not to mention that the reimbursement is insufficient in most government programs as we all know."

More and more health care organizations are abandoning Medicare Advantage plans.

Nate Kaufman, a San Diego-based health system consultant, wasn't surprised at Scripps' news.

"I advise all hospitals to terminate their Medicare Advantage plans with anybody unless they're getting over 115% of Medicare," Kaufman told MedPage Today.

My experience with these Advantage plans was almost a decade ago, but I still wonder why the plans have survived at all. Thankfully, some of the larger organizations are drawing the conclusions that it is time to no longer participate in these plans. Why is Medicare bailing out Advantage Plan insurance companies with 20.5 million dollars while these companies deny healthcare access to patients and reasonable payments to doctors and hospitals?

Time for Medicare to stop supporting Medicare Advantage plans at the expense of patients, hospitals, and physicians.