How do I find out what Medicare covers? What about Supplements and Advantage Plans? Is there anything one covers the other doesn’t?
I’ll make the answer to the first question very simple. There isn’t much Medicare doesn’t cover. I can count on one hand the number of treatments or services that we’ve discovered a client wasn’t covered for, and we’re talking about thousands of people over a span of more than 11 years.
There’s only one somewhat common item or service that I’ve found isn’t paid for surprisingly; compression stockings.
This leads us to the question of what Supplements and Advantage Plans cover. Let’s start with Supplements. If you’re an avid reader of the column, you probably know that Supplements, aka Medigap policies, are highly Federally regulated. One of the regulations is if Medicare covers a treatment, service, medical device, etc., the Supplement company must pay their share, which generally is the balance of what Medicare doesn’t, hence the term “Medigap.” In other words, the Supplement company has zero say in what’s covered. If Medicare pays, the Supplement company pays, no questions asked.
This is good and bad in my opinion. On a micro level it’s wonderful because Medicare basically never denies claims. If a doctor thinks something is medically necessary such as an MRI, CT Scan, an extra day or two in the hospital, Medicare and the Supplement pay the bill in full. I like to say, “Medicare lets the doctor steer the ship.” With private health insurance, which includes Advantage Plans, the company can dictate to a doctor, hospital, and patient what is going to be covered, or not. We’ll discuss that momentarily.
On a macro level, there’s a big problem with Medicare being so liberal paying claims. Another one of my favorite sayings is, “Medicare pays first and asks questions later, if ever.” This results in tremendous waste, fraud, and abuse.
A 2015 ABC News report stated that the Centers for Medicare estimated that in 2014 alone, there was $60 billion in fraudulent charges paid, over 10% of the total Medicare budget! This kind of criminal activity costs tax payers and ultimately contributes to higher premiums for both Medicare Part B and Supplements.
Which takes us to Advantage Plans HMO’s and PPO’s, which I previously stated can deny claims. There are also many services that need prior authorizations, meaning before you can have a service such as an MRI, CT Scan, Outpatient Surgery, Home Health Care, and others, the insurance company needs to give it the “okay.” Again, there’s both a positive and negative to this situation. Private health insurance companies pay much more attention to assure they’re not paying claims for services that were never administered, over prescribed, etc., keeping fraud to a minimum and ultimately premiums down. And when it comes to the lower priced HMO and PPO Advantage Plans, Western PA companies have done a very nice job of that. $0 and other low-cost premium plans have been available since their inception in 2004.
The negatives of Advantage Plan companies being allowed to call the shots are obvious. You can have a claim denied, although I must say that’s become a rarer occurrence in the past few years and I commend for making a conscious effort to keep that to a minimum. It can also be an inconvenience to have to wait for something as common as an MRI to be authorized.
As far as if there’s anything covered by Medicare and a Supplement vs an Advantage Plan, the answer is yes. Almost all Advantage Plans cover Part D prescriptions while Supplements do not. You must purchase a separate prescription plan if you choose a Supplement and many of them have a deductible as high as $415. No Western PA Advantage Plans have a prescription deductible.
Unlike Supplements, Advantage Plans can also provide some “ancillary benefits” such as dental, vision, no cost gym access, and possibly Over the Counter (OTC) benefits, which together, offer some nice value. Be advised that some plans provide more comprehensive programs than others, especially when it comes to dental. We also never recommend making a decision based on these benefits alone, which I often refer to as “sizzle”. Premium cost, co-pays for a hospital stay, the Maximum Out of Pocket, and access to doctors and hospitals are the most important factors to consider in my opinion.
When it comes to what medical services are covered, Advantage Plans are regulated as well and must cover everything that Medicare does, and as good or better than Medicare. There are a couple of caveats, however. One we already discussed. Advantage Plans can deny claims or advise the hospital they will not pay for any additional days as an inpatient. Be advised you can appeal those decisions. Secondly, even though the same services are covered, what you pay for them can be very different. Those on Supplements pay little or no bills, while those on Advantage Plans are exposed to between $3,400 to $6,700 per year.
My advice is to sit down with one of the licensed agents at The Health Insurance Store and get the pros and cons of both types of plans explained in detail before deciding which is the best way to go. If you’re already enrolled in either a Supplement or Advantage Plan, we invite you to visit with us anytime during the year, not just during Annual Election Period, for a no-cost consultation.