ORIGINAL MEDICARE, MEDICARE ADVANTAGE AND PRIVATE HEALTH INSURANCE: CHOOSING BETWEEN ORIGINAL AND MEDICARE ADVANTAGE—PART 2

Continuation of last blog’s discussion of this complex and significant choice.

c. Original Medicare and Medigap give you the flexibility to go to virtually any provider anywhere in the country.

Medicare Advantage HMOs generally limit enrollees to networks, which don’t include all providers, require referrals to specialists, and will not provide coverage out of network except (1) in urgent or emergency cases if the patient is out of the geographic service area or (2) with prior permission if an appropriate practitioner is not available in the network.  

Medicare Advantage HMOs are not appropriate for “snowbirds” or frequent travelers, or if your client’s physicians are not in network or, in my opinion, for the reasons stated above, if you are a Medicaid recipient.

Although requiring “prior approval” for many common services, the Medicare Advantage PPOs do cover out-of-network services at an additional cost or co-pay, do not require referrals for in-network specialists, and are more appropriate for travelers. 

Visit www.medicare.gov for individual information.

d. Original (fee-for-service) Medicare appeals usually involve denials of payment and there is generally no opponent at the hearings held before Administrative Law Judges.  Also, the provider or physician is usually your economic ally in seeking payment.  Note, however, that Part D prescription drug appeals, even for those enrolled in non-Advantage Prescription Drug Plans (PDPs) often involve denials of service, not payment, and tend to pit the patient against the pharmacist-provider.  The Part D appeals process for both Advantage and non-Advantage plans is clearly modeled on the Advantage appeals process.

Medicare Advantage HMO and PPO appeals often concern denials of care and the HMOs are represented by attorneys at ALJ hearings to argue against you, take appeals from ALJ decisions favorable to you and must be made a party to any Federal District Court appeals.   Moreover, because of the risk-sharing economics of the HMO and PPO networks, your physician is often not your economic ally in seeking approval of the care. 

The Medicare Advantage PPOs require “prior approval” for many common services, whether in or out of the network, some of which are, incredibly, not disclosed, and are, thus, more similar to the HMOs and their primary care physician “gatekeepers” than to Original fee-for-service Medicare in this critical “access to care” element of your health care.  

e. Physicians and other providers are generally paid on a fee-for-service basis in Original Medicare. If you are enrolled in Original Medicare, the provider’s economic incentive is usually to provide you with health care.

Medicare Advantage HMOs and PPOs turn this economic incentive on its head.  For each individual, sick or healthy, who is enrolled in a Medicare Advantage HMO or PPO, the government pays that plan a set amount of money (capitation rate) each month to provide all care to that enrollee.  The economic incentive is to not provide care.  The closely-guarded HMO and PPO contracts with network Primary Care Physicians (gatekeepers) rope them into these economic incentives to not provide care, setting up physicians and other providers to do economic battle with their patients. 

Indeed, the Medicare Advantage law, itself, encourages and enshrines economic risk-sharing with Primary Care Physicians and other providers by warranting that Medicare Advantage Organizations:

may make arrangements with physicians or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians or other health professionals or through the institutions.

42 USC §1395w-25(b)(4). 

Conversely, it is extremely unlikely that a Medicare Advantage HMO or PPO will encourage you to suffer through any unnecessary treatments or surgery.

f. Original Medicare and your Medigap insurance company will almost certainly be in business next year. You will not be left scrambling for alternative health insurance or providers.

The Medicare Advantage Organizations’ contracts with CMS to provide Medicare Advantage Plan coverage in a defined geographic area last for only one year and the Plans can pull out or reduce the size of the area upon simple prior notice to CMS and enrollees.

With either an MA or MA-PD Plan termination, the enrollee gets a special election period to find a new Medicare Advantage Plan or go back to Original Medicare. 

The termination danger is not theoretical and you should be careful:  plan terminations have been a serious and continuing problem and enrollee protections do not limit disruptions in continuity of care, uncertainty and stress.

(The above is for informational purposes only and does not constitute an attorney-client relationship, nor is it legal advice.)                     

References:
www.cms.gov
www.medicare.gov

Medicare and You 2015 Handbook (get from Social Security office)

Choosing a Medigap Policy (get from Social Security office)

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