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Who Gets the Advantage? False Promises and Hidden Costs
May 17, 2007 • Volume 7, Issue 20Low-income people with Medicare enrolled in Medicare Savings Programs (MSPs) receive assistance in paying the out-of-pocket costs of Medicare.
Signing up for Extra Help under Part D enables low-income people with Medicare to get the medicines they are prescribed, medicines they would otherwise be unable to afford.
Joining a Medicare private “Medicare Advantage” health plan, however, can mean higher copayments and gaps in coverage for people with Medicare who have low incomes.
Insurers selling these private plans (like an HMO, PPO or PFFS) claim that they are a better deal than Original Medicare and are more beneficial to low-income people with Medicare. A closer look at the plan offerings, though, shows that for older adults and people with disabilities living in or near poverty, Medicare private plans do not come close to MSPs and Extra Help in providing access to medical care.
Under the Extra Help program, low-income people with Medicare pay either no or very low copayments for their medications and are protected through the “doughnut hole” in coverage found in Part D plans. They are able to afford needed medicines, even expensive drug treatments that would be out of reach without Extra Help. Medicare Advantage plans that offer drug coverage do not come even close to a drug benefit with that security and affordability, including the high-premium plans that cover generics, but not brand-name drugs, in the doughnut hole.
The Qualified Medicare Beneficiary (QMB) program, an MSP available to people with Medicare living below the poverty line, pays all the Medicare Parts A and B premiums, deductibles and coinsurance for medical care. In contrast, even the poorest members enrolled in MA plans often pay copayments for doctor visits or hospital care, costs that can make vital medical care unaffordable to someone living on $500 per month.
Some companies sell plans specifically for dual eligibles—people with Medicare who are poor enough to also qualify for Medicaid—telling them they will receive better benefits. Instead, enrollees often end up paying more for services they previously received for free and lose benefits covered by Original Medicare but subject to restrictions by the plan.
Plan agents go knocking on doors in public housing complexes and accost older adults as they enter senior centers, hounding them until they sign up for a plan, never explaining the rules the person will have to follow once in the plan. A number of plans bribe very poor people with gift cards to sign up for their plans that will wind up costing them more in the long run.
Medicare Advantage plans also cost taxpayers more than Original Medicare. Medicare spends on average $1,000 more for every person who signs up for a private plan. In 2007, overpayments will total $7.5 billion. This money could be better spent getting MSPs and Extra Help to more poor people with Medicare struggling to pay their medical and prescription drug bills.
Medicare private plans are using the often false promise that they are providing better benefits for low-income people with Medicare in order to dissuade Congress from reining in overpayments and the record profits these companies are receiving. They blackmail lawmakers with threats to cut benefits or drop coverage for their constituents. Lawmakers need to see through this scam. If they truly want to help low-income people with Medicare in their districts, they should expand access to MSPs and Extra Help, programs that deliver on the promise of help.
Medical Record
“I am a resident services coordinator for about 100 low-income elderly and people with disabilities living in public housing. People who have Medicare and full Medicaid benefits are targeted by Medicare Advantage plan salespersons to switch their Original Medicare to get ‘more and better coverage’ at zero premium. Residents realize the switch is not ‘more or better’ when the plan is not accepted by their physician, or the drug formulary may be restrictive, or their long-time diabetic supply provider cannot accept the new plan. They are then bombarded with advertisements and other mailings. Once [these people are] overwhelmed, often important mail is discarded because they simply don’t want to deal with it any longer” (Story submitted to the Medicare Private Health Plan Monitoring Project, Medicare Rights Center, May 4, 2007).
“In Original Medicare people can buy supplemental insurance to cover Medicare deductibles and coinsurance, which makes their out-of-pocket costs fairly predictable regardless of what medical care they may need. People with low incomes may be eligible for assistance programs, like the Qualified Medicare Beneficiary (QMB) or Medicaid, to cover those costs. People in private health plans, on the other hand, cannot get supplemental coverage for the unexpected out-of-pocket costs they may have to face if they become seriously ill with the ‘wrong’ disease for their plan” (“Too Good to Be True: The Fine Print in Medicare Private Health Plan Benefits,” Medicare Rights Center, April 2007).
“[W]e will only succeed in getting full enrollment in both MSPs and Extra Help through some method of automatic enrollment or presumptive eligibility. When Congress decided to charge higher Part B premiums to wealthier people with Medicare, it decided to use tax data to determine who should pay the higher premium. There is no application or documentation requirement; individuals have to appeal not to pay the surcharge. A similar use of income data already in the government’s possession could find and enroll everyone who qualifies for MSPs and Extra Help” (Testimony of Monica Sanchez, Deputy Director of Medicare Rights Center, before the U.S. House of Representatives Committee on Energy and Commerce, Subcommittee on Health, May 15, 2007).
***** The Medicare Rights Center (MRC) would like to hear about your experience, or that of someone you know, enrolled in a private health plan. With information about what the issues are with Medicare Advantage plans, we will be able to demand that those problems be fixed.
Medicare Private Health Plan Monitoring Project
Submit your story at http://www.medicarerights.org/maplanstories.html.
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