Most Medicare Advantage plans have set co-pays for services like doctor visits and outpatient surgery.  This plan design should make it simple for people to understand the bills they receive from doctors, hospitals, and outpatient surgery facilities.

Yesterday I got a call from Shirley, who is enrolled in a Medicare Advantage plan. She had surgery on her foot at an outpatient surgery facility.  She paid the $150 co-pay as required by her Advantage plan – and that’s a good deal.

A month after her surgery, Shirley got a bill saying she owed $75 for anesthesia and $100.78 for a doctor’s assistant.  Whaaat?

When I enroll someone in a Medicare Advantage plan, I tell them to call me if they have any problems, like an unusual bill they receive from a provider, or a problem getting prior authorization for a test.

Thank goodness Shirley remembered my advice – because she should not be getting those bills. It sounds like the Shirley was being “balance billed” – and that should not happen to people who are enrolled in Medicare Advantage plans.

I asked Shirley if she had spoken to her Medicare Advantage plan’s Member Services, and she said she had.  The person she spoke with said she probably owed those bills.  Whaaaat?

I called Shirley’s plan and I was instructed to tell Shirley to call Member Services again and hope she gets somebody who knows what they’re talking about.

Shirley made the second call and talked a another (more experienced?) representative who told her she should not have to pay those bills. Shirley was told her plan would talk to the billing department for the two different doctor groups who were balance billing her.  Her Advantage plan would get this problem fixed.

I asked Shirley if the Member Services rep said he would get back to her, but Shirley said this did not happen. Hopefully all this does get resolved – and quickly. You see, hospitals, doctors, and medical groups do not wait around to get paid.  They very quickly turn over unpaid bills to collection agencies, and collection agencies quickly send negative reports to credit rating companies. Here is one such story.

Shirley is pretty sharp, and she has kept the Summary of Benefits and the Evidence of Coverage for her Medicare Advantage plan. She referred to the Evidence of Coverage (100+ pages) when she spoke to the billing department for the doctor group, but they were not swayed. They said she owed the money.

I told Shirley it was up to her Medicare Advantage plan to fix this problem because they have a contract with the surgical facility that says they will pay a certain amount for each medical service. I would assume the contract says they should not balance bill the patient.

Important lesson #1:  People need to know how their Medicare Advantage plan works, so they don’t end up paying bills they don’t owe.

Important lesson #2:  If you don’t get the answer you think you should get from your Advantage plan’s Member Services, try calling again. It is possible you spoke to an inexperienced employee who gave you the wrong answer.  You could also ask to talk to a supervisor if you are pretty sure that rep is wrong.

How does a person pick a Medicare Advantage plan?  Is the hospital network the most important factor?  Is having the biggest network of doctors important?  Is the plan with the lowest co-pays for doctor visits and hospital stays the top choice?  Are drug co-pays for expensive brand drugs the deciding factor?

The answer to all the questions above is “yes”….. depending on the person making the decision.

HOSPITALS:

Some people want to go to University Medical Center (UMC in Tucson) if they need complicated surgery – but only two Medicare Advantage plans in Tucson are contracted with UMC. So this would narrow down a person’s choices for a Medicare Advantage plan pretty quickly.

DOCTOR NETWORK:

Some people have four or five doctors and they want to keep seeing them when they get on Medicare. If they want an Advantage plan, their insurance agent will need to make sure all their doctors are contracted with the plan he recommends.  In Tucson there are two or three Advantage plans that have very large networks that might include all five of a person’s doctors.  So this will narrow down a persons Medicare Advantage plan options.

LOWER CO-PAYS:

If a person is turning 65 and hasn’t been to a doctor in a long time, she might be more open to a small-network Advantage plan. Small-network plans will have lower co-pays for doctor visits, hospital stays, outpatient surgery, and skilled nursing facility charges.

If cost is the most important factor for someone turning 65 and considering Medicare Advantage, they will choose an Advantage plan that has a small network.

DRUGS:

Drug co-pays can vary from Advantage plan to Advantage plan. One brand drug might have a $45 co-pay on one plan, and that same drug might have a $95 co-pay on another plan.  Even co-pays for generics can be very different from plan to plan. One Advantage plan charges $15 for Hydrocodone while another plan charges $40 for the same generic drug.

Insulin is another drug with very different co-pays from plan to plan. One plan has no charge for insulin, except for the new insulin pens that are easier for people to use. These insulin pens have a $35 co-pay, but the lancets have no co-pay.  Most Advantage plans charge a $45 co-pay for all insulin, and one plan charges $35 for the insulin pen lancets in addition to the $45 pen co-pay.

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I can’t name names here because I am an insurance broker and I cannot be seen as promoting one Advantage plan over another.  Actually, there isn’t one plan I would say is “the best” - which is something Medicare strictly forbids agents from saying.  Some plans have big networks. Some plans have a smaller network and lower co-pays.

I have talked to people who are diabetic and suggested they enroll in the plan that has no charge for insulin. But a number of people would not consider this plan even if they could save a lot of money on their medical and drug bills. Their decision came down to keeping their three or four doctors, or their concern about being in a Medicare Advantage plan with a small network of hospitals and doctors.

Picking a Medicare Advantage plan is easy for a healthy person. For folks with a long list of doctors and drugs, selecting a Medicare Advantage plan can be quite complicated.

I have lost track of the number of clients who have asked me how Obamacare will affect their Medicare Advantage plan. They saw so many advertisements during the election campaign about how millions of seniors will lose their Medicare Advantage plan, and how $700 billion is being “stolen” from Medicare to be used for Obamacare. They are worried.

I tell these folks that I read a lot about Medicare and Obamacare – and I don’t think Medicare Advantage is going anywhere but up. In fact, since 2010, when Obamacare was passed into law, Medicare Advantage enrollment has grown 28%. On top of that, enrollment in Medicare Advantage is expected to grow 11% from 2012 to 2013.

I tell people that Obamacare does cut payments to Medicare Advantage plans because, since 2006,  Advantage plans have been overpaid by 10 – 14% each year. This has been very good for insurance companies’ profits, but it is not good for the Medicare budget.  But the reductions in payments to Medicare Advantage plans are taking place over several years so there is no big financial shock that would drive insurance companies out of the business.

According to CMS (Centers for Medicare and Medicaid Services), Obamacare payment cuts have had no negative effect on Medicare Advantage (MA) premiums and co-pays.  Of course, MA co-pays have been inching up each year – but that was happening before Obamacare.

I have written previously about how big insurance companies like United, Aetna, Wellpoint, and Cigna have spent billions of dollars buying Medicare Advantage plans. They seem pretty sure the Medicare Advantage business will be generating profits for years to come.

In Maricopa, Pima, and Pinal counties in Arizona, nearly 50% of Medicare beneficiaries are enrolled in Medicare Advantage plans. In Florida, California, Pennsylvania, and several other states, Medicare Advantage is huge. (Note: Florida Advantage plans are much better than what we have here in Arizona.)

With over 12 million people enrolled in Medicare Advantage plans across the country, I don’t see any politicians (who want to keep their jobs) pushing to end Medicare Advantage.

Based on all the evidence I’ve seen, I’m pretty sure Medicare Advantage is here to stay.