Medicare Advantage Insurance

By: Tony Jackson

Is Medicare Advantage really an “advantage” at all?

Before I answer that question, allow me to go back to the basics.

According to Wikipedia:

“With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans, instead of through the original Medicare plan (Parts A and B). These programs were known as "Medicare+Choice" or "Part C" plans. Pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, "Medicare+Choice" plans were made more attractive to Medicare beneficiaries by the addition of prescription drug coverage and became known as "Medicare Advantage" (MA) plans.”

Medicare Advantage Plans are normally HMO’s and PPO’s, but Part C also includes plans known as PFFS plans or Private Fee For Service plans. These plans generally allow the Insured to go to any doctor or hospital that “accepts those plans” (something known as “deeming”). For a long time, one of the criticisms of those who marketed these plans was that they did not explain the full ramifications of “deeming,” that a doctor or hospital may choose to accept or reject these plans on a case by case or day by day basis.

So then, what if anything is the “advantage” these plans?

Generally, there are two major advantages (in my opinion) to these plans.

1) These plans in many cases, made health coverage affordable to many people who previously were not able to afford supplemental insurance.

2) These plans added (in many instances) the “Part D” or Prescription Drug Plans and “bundled” those plans with the health insurance coverage itself.

Think of it like this. Before the Medicare Advantage plans, many low-income and poor Medicare beneficiaries had a Volkswagon Beetle, with a small engine and very little gas. In an emergency, they could count on Original Medicare to get them to the hospital, but in many cases, after a series of extended hospital stays for instance, they might come out and find someone had stolen the only gas they had left in that the little car.

What Medicare Advantage did for these people was give them a tune-up on that engine. What Part D did for these folks was give them a full tank of gas.

What has happened however is that the insurance companies (the mechanics and gas dispensers) began to keep more and more of that gas for themselves, to the point where radical government intervention (HR 6331 is a start) has been needed to safeguard the benefits of the Beneficiaries.

Are there drawbacks to these plans? I can think of at least a couple.

1) Part D formularies (the list of allowed drugs and the amount of coverage) are often very complex and they change from year to year. Often times, in the bundled plans (MA-PD), what one hand gives, the other takes away. What I mean is that there may be many brand-name drugs that are excluded from the plan, or have an increased cost sharing (higher tier).
When you offer Medicare Advantage Plans, particularly those bundled with Part D, you need to be very careful to make sure that the client has the best coverage for their particular situation (i.e. for those medications that they actually take).

2) Another disadvantage to these plans is that there are sometimes hidden costs that are very difficult to find.
For example, a particular plan may state that the Insured will have a “maximum out of pocket annual expense.” In the fine print however, there may be an asterisk, next to which states, “certain exclusions apply.” Good luck trying to find all of those exclusions! I have never seen a case where these “exclusions” are listed in the Outline of Coverage. In some cases, after hearing about exclusions in a training session, I have called the company and asked them outright, is this or that particular procedure covered? Sometimes, this is the only way to find out what those “exclusions” happen to be.

Over all, there is nothing inherently good or evil about marketing Medicare Advantage plans. Like anything else, if you generate Medicare Insurance leads, you simply need to ensure that the products you review with your client are suitable for the needs of the client. Never forget the maxim:

“You can have everything you want in life if you give enough other people what they want.”

For more information about obtaining quality Medicare Advantage Leads, visit our marketing page.


About the Author:

Tony Jackson is an authority on Medicare Advantage. Tony is the author of Medicare Marketing Gold