When I opened the Wall Street Journal this morning, I found an article about Medicare Advantage Plans that I wanted to share with you.
One of the scary data points in this article, “A separate analysis prepared for the Centers for Medicare and Medicaid Services and presented at a conference in Baltimore in September, found a 46% chance that an Advantage plan’s listing of a primary-care physician, oncologist, ophthalmologist or cardiologist contained some sort of inaccuracy, including where the provider was located or whether they were accepting new patients.”
There are a lot of limitations with Medicare Advantage Plans and they have an annual out of pocket maximum up to $6,700. Original Medicare with a Medicare Supplement (Plan F, G, or N) has much greater flexibility (doctors & hospitals) and very limited to $0 out of pocket expense. See this article for more differences between Medicare Advantage & Medicare Supplements.
A Better Way?
Now that Republicans control both the Senate and the House, it seems more likely that the recommendations in the 2015 “Path to Prosperity” (P2P) budget proposal and 2016 “A Better Way” will get more traction.
Generally, I agree with a lot of the suggestions and proposals in this budget plan. Spending is out of control in this country, and I am concerned about the long-term effects this will have on our children (and children’s children, etc.).
There is one area of the proposal that concerns me greatly, Medicare. Specifically, Path to Prosperity is proposing,
"… For future retirees, the budget supports an approach known as ‘‘premium support.’’ Starting in 2024, seniors (those who first become eligible by turning 65 on or after January 1, 2024) would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program on a newly created Medicare Exchange. Medicare would provide a premium-support payment either to pay for or offset the premium of the plan chosen by the senior, depending on the plan’s cost. For those who were 55 or older in 2013, they would remain in the traditional Medicare system.
… Also starting in 2024, the age of eligibility for Medicare would begin to rise gradually to correspond with Social Security’s retirement age and the fee-for-service benefit would be modernized to have a single deductible and by reforming supplemental insurance policies."
For those on Medicare before 2024 (most of our newsletter readers)...
this proposed change should not impact you. However, I implore you to read on to understand the impacts of the changes being proposed for others.
For those who will not be Medicare eligible until 2024...
this proposal will increase the eligibility age for Medicare. This, I agree with. In 1965, the average life expectancy was 74 years. In 2015, the average life expectancy was 81 years. As someone who will be impacted by this change, I am supportive of potentially not getting my Medicare benefit until age 67 (or even 70) if it helps the solvency of the Medicare system. We need to make things change soon so individuals younger than 55 have time to plan for this change.
However, I do not agree with dramatic reform to supplemental insurance policies. This will weaken Original Medicare with a Medicare Supplement so the coverage is not as robust, and it will add a Marketplace for individuals to shop for Medicare Advantage Plans. Essentially, the Republicans plan will to move more and more people to Medicare Advantage Plans. The theory is that there will be a great cost savings for the Medicare Program with this change.
This proposed change will SIGNIFICANTLY impact the health care of our most healthcare-needy population, seniors. This is NOT the direction we should go with Medicare. With Original Medicare and a Medicare Supplement, our clients can go to the best hospitals in the country when they need it most. And, they have. We have clients that have had very serious (sometimes life-threatening) conditions get the best medical attention available at Johns Hopkins, Sloane Kettering, Cleveland Clinic, Mayo Clinic, Hospital of Special Surgeries, etc. If these clients were on Medicare Advantage Plans, they would NOT have had that flexibility and may not be with us today.
As a member of the Medicare Advisory Board of National Association of Health Underwriters (NAHU), we have already begun discussions on how to prevent these proposed changes from happening in 2024. There are other ways for the system to save money and we are working hard to make sure different solutions are implemented so seniors can continue to get the best Medical attention and coverage available. At NAHU, have a prep meeting in January and our annual Capitol Conference in February where we will be lobbying hard against some of these changes being proposed.
We will keep you posted as our discussions progress and may ask for your help to reach out to your local Congressman about this very important issue with Medicare.
See bio here