American Retired Seniors

Resource: By BOB MOOS – The Dallas Morning News

Every fall, Medicare beneficiaries are bombarded with sales brochures for private health care plans that promise more benefits and lower bills than they get in traditional Medicare.

This fall, some seniors will give those plans a closer look. With their retirement nest eggs cracked or smashed by the financial crisis, many are searching for ways to reduce health care costs.

“Retirees are terrified by the economy and cutting to the bone,” said Dallas insurance broker Nancy Gordon. “They’ve seen their retirement accounts shrink, and they’re stretching every dollar.”

Over the last five years, the number of seniors enrolled in Medicare Advantage plans has almost doubled to 10.1 million, or about one in four Medicare beneficiaries.

The Advantage plans are basically a private version of Medicare. Instead of paying beneficiaries’ claims directly, the government pays private insurers to oversee seniors’ care.

Experts say the plans appeal to seniors who have fallen on hard times because they combine hospital and physician coverage with additional benefits such as drug insurance and vision care.

But consumer advocates urge budget-conscious beneficiaries to look past the promises of extra benefits and read Medicare Advantage’s fine print before abandoning traditional Medicare.

Lue Taff, the elder support director at the Senior Source in Dallas, said her staff fielded more than 100 calls last fall and winter from seniors who ran into trouble after joining private plans.

The Senior Source says it’s bracing for more calls when Medicare Advantage’s annual sign-up period begins Nov. 15.

“The most common problem has been that some physicians and hospitals don’t see patients on Medicare Advantage plans, so seniors sometimes must look for a new doctor,” Ms. Taff said.

Leonard and Nancy Huber of Garland dropped their supplemental health coverage in traditional Medicare last year and enrolled in a private plan to pare more than $300 a month from their premiums.

Though the couple said the private plan’s sales representative told them that they could keep their physicians, they soon discovered that Mrs. Huber’s doctor didn’t accept her new insurance.

“It put us at a dead end,” Mr. Huber said. “My wife went without seeing her doctor and getting her medication for a couple of months until we could return to a supplemental policy.”

Seniors considering Medicare Advantage plans should ask themselves whether they would mind changing physicians, Ms. Gordon said

“Don’t switch without doing your research,” she said.

Promise of savings

The Advantage insurers say their plans save people an average of $90 a month in out-of-pocket expenses and are especially attractive to low-income seniors who can’t afford traditional supplemental policies.

Medicare Advantage plans typically have fixed co-payments, which make it easier for seniors to predict health care costs, said Cindy Polich, an executive with Ovations, a United HealthCare business unit.

Some of the private plans also advertise annual maximums on out-of-pocket costs to give beneficiaries protection against catastrophic medical expenses, she said.

Vernon and Marjorie Metz of North Richland Hills estimate they’ve saved $2,000 since switching from a traditional supplemental policy to a Humana Medicare Advantage plan a year ago.

Each now pays $60 a month in premiums and slightly more than $5 for a doctor’s visit. Though their old policy covered all of their out-of-pocket expenses, each paid $165 a month in premiums.

The retired missionaries especially enjoy the fitness club membership that comes with their Medicare Advantage coverage. The two have become regulars at a recreation center near their home.

“You’ll find me at my aerobics class every Wednesday morning,” said Mrs. Metz, 85.

The club membership is part of the Humana health plan’s emphasis on wellness and preventive care, said George Smith, a Humana executive in Texas.

Growing concern

A survey done for an insurers’ trade group, America’s Health Insurance Plans, found that 88 percent of the seniors enrolled in Medicare Advantage plans are satisfied with their coverage.

Still, there’s growing concern over whether the private plans are a good deal.

The Government Accountability Office, the investigative arm of Congress, has found that some seniors in private plans pay more out of pocket for home health care, hospital stays and skilled nursing care than they would in traditional Medicare.

The GAO report also pointed out that some plans exclude the cost of certain cancer drugs, home health care services and mental health services from their annual out-of-pocket maximums.

Beneficiaries who depend on such drugs and services may end up spending thousands of dollars more each year than they were led to believe, said Robert Hayes, president of the Medicare Rights Center, a consumer advocacy group.

“We hear from many people who get sick and discover their Medicare Advantage coverage isn’t what they thought,” he said.

Choosing a private plan can also be maddening for even the savviest consumer, Mr. Hayes said.

“The number of plans runs into the dozens in many parts of the country, and the fine print seems endless,” he said. “It’s not a rational marketplace. It’s the Wild West, where consumers are often shooting in the dark.”

Experts say beneficiaries looking for help in comparing plans should turn to Medicare’s Web site  www.medicare.gov) and toll-free help line (1-800-633-4227) and to community agencies.

“Be humble. Ask for advice,” Mr. Hayes said.

AT A GLANCE: FILLING IN MEDICARE GAPS

• Medicare pays only part of the cost of a senior’s health care.
• Seniors often fill in the coverage gaps by buying supplemental health insurance or joining a private Medicare Advantage plan.
• Monthly premiums for supplemental insurance usually run a couple of hundred dollars beyond the $96.40 that seniors pay for basic Medicare coverage. In return, the policies cover most out-of-pocket costs.
• Medicare Advantage plans run the same or slightly more than the $96.40 a month that seniors pay for basic Medicare coverage. But the plans may also have deductibles, co-payments and other cost-sharing.

WHERE TO TURN FOR HELP

Online: Compare Medicare Advantage plans at www.medicare.gov.

By phone: Talk to a Medicare customer service representative at 1-800-633-4227.  

Filed under: Medicare and Health Insurance