Healthful Hints: Medicare, Medicare Advantage plans: Basic differences

Tis the season for Medicare insurance open enrollment, Oct. 15-Dec. 7. And the air is brimming with advertising for "Medicare" plans we oldsters can purchase. Television channels repeatedly run circus-like ads telling you their plans are such a deal. Billboards sport the same messages. And newspapers come with slick flyers spouting the same stuff. An editorial appeared recently in the Minneapolis Star-Tribune with the headline "Health plan bargains abound again in 2023. A day later a letter to the editor by a doctor, labeled "Only a 'bargain' if you squint," had some contrary thoughts.

This is a column about medicine. But paying for the care of medical disease and illness is a crucial part of medicine. So, as neutrally as I can, I'll give a vastly oversimplified comparison of original Medicare (OM) and Medicare Advantage plans (MAPs) in this short space.

On July 30, 1965, President Lyndon Johnson signed into law the bill that led to Medicare, medical assistance for seniors, and Medicaid, medical assistance for low-income folks. Medicare plans were defined as Part A (hospital care) and part B (office care). In 1972, some arrangements came into being gradually to allow private insurers to enroll certain individuals. In 2003, the Medicare Prescription Drug Improvement and Modernization Act made the biggest changes to Medicare in 38 years.

Private health plans approved by Medicare became known as Medicare Advantage plans (MAPs), or part C, because they include both OM parts A and B. It also expanded Medicare to include an optional prescription drug benefit, part D, which became effective in 2006.

To reiterate, the fundamental structure of OM is part A for being in hospital and part B for other medical expenses excluding drugs, vision, hearing and dental care. It pays 80% of the assigned amount decided and accepted by Medicare "providers." Benefits are identical from person to person. Almost all doctors/providers accept Medicare patients. So, there is no limited "network" of providers. You have to pay the other 20% of fees out of pocket with no limit to that amount per year. To compensate for that, Medicare supplemental insurance plans from private companies, called Medigap plans, like Blue Cross, etc., can be purchased.

MAPs are intended to be all-in-one alternatives. They pay for parts A and B and often, but not always, have a drug plan, and dental, hearing and vision plans rolled in. These are sold by private companies, who are paid a fixed amount by Medicare to accept you. These can be confusing and baffling because the private companies can make rules to set all sorts of different fees, depending on your age, pre-existing conditions a (big one!) and even zip code.

The ads the MAPs put out sound SOO good. Zero monthly premiums and maximum out-of-pocket annual costs of $7,550 as of now are selling points. But the benefits are different from plan to plan. You still have to pay your part B premium. A big drawback is that you are in a limited doctor network, and you generally need a referral to a specialist! If your doc/provider leaves the network, you have dig up a new one. Another negative to MAPs is the high cost per uncovered service. That means the plan is cheap if you are not sick and don't ask them to pay. But the out-of-pocket surprises for lots of expenses not covered by the MAP can be exorbitant and not worth it. These plans can change rules from year to year, unlike OM.

If you enroll in an MAP, don't like it, and want to get back into OM, it may not be easy, especially to find a Medigap plan.

You have to bear in mind that private "health" insurers do just that, insure your health, but not so much your sicknesses. They make money from your premiums, not from paying your bills. Charities they aren't. I have a skewed perspective from battling insurers when I was in practice full time. They fight tooth and nail to avoid or delay paying. That's no secret. The editorialist MD points out that "health care debt is the biggest cause of personal bankruptcy" in the U.S. Also, health/medical care in the U.S. is approximately twice as expensive as in other developed nations. It's hard to end with anything humorous. Just remember that, as you read these glowing offers and see TV ads with smiling, perfectly healthy looking, attractive geezers getting sales pitches, if it sounds too good to be true, think about it. Shop carefully. It can be really a struggle to comprehend. Good luck. And take some Tylenol before you go to talk to the seller.