Column: Enrolling in Medicare? What you should know about TV time, fraud and what's next

Medicare Advantage Open Enrollment, or “open season,” is here, and the airwaves are full of pitches from William Shatner or Joe Namath urging you to sign up now!

Not so fast.

Last November, Forbes Magazine warned, "Based on the commercials that are on television every day, people see something they think is going to be more cost effective and opt for Medicare Advantage coverage without really knowing what they're getting into."

Under traditional Medicare, the federal government pays directly for seniors’ healthcare. Beneficiaries pay monthly premiums and need to meet a deductible, but patients have access to a wide range of doctors and hospitals across the country. Many patients choose to enroll in a supplemental “Medigap” plan to limit their out-of-pocket costs.

Under Medicare Advantage (MA), the government pays a commercial insurance company to “manage” patients’ care. Premiums tend to be lower than they are in traditional Medicare, but patients can face high out-of-pocket costs. They can also be stuck with highly restrictive physician and hospital networks, and face the hassles of prior authorization and denial of care. If they need a nursing home stay after a hospital admission, they may be surprised at how little MA plans cover compared to traditional Medicare. Seniors realize too late that they should have read the fine print. (Traditional Medicare has no “fine print.”)

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In that Forbes article they warn, "Medicare Advantage enrollees could wind up paying out of pocket as much as $7,500 a year… These plans work best if you don't get sick."

It gets worse. Ever wonder why the MA companies spend so much on all that advertising?

The front-page headline of the New York Times Oct. 8, 2022 read: “’The Cash Monster’ Was Insatiable: How Insurers Exploited Medicare for Billions.” They document how most large insurers in MA have been accused in court of fraud, including Elevance (better known by its previous name Anthem), based in Indianapolis and facing charges of fraudulent Medicare Advantage coding and billing for over $100 million. The Times reviewed dozens of fraud lawsuits, inspector general audits, and investigations by watchdogs to show how major health insurers exploited the program to inflate their profits by billions.

The Times estimates these companies overbill US taxpayers by at least $12 billion every year. The high-end estimate is $25 billion, more that the annual budget for NASA. Even the bottom-range estimate is more than the annual budget of the FBI or the Environmental Protection Agency.

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These companies are typically earning twice as much gross profit from their MA plans as from other insurance products they sell. That’s why it pays to buy TV time. This outrageous scandal has been known for years.

Finally, the Times article is literally putting it on the front page. Some call it “Medicare Dis-Advantage.” While MA is rife with problems caused primarily by the greed of insurance companies, patients at least have the choice between an Advantage plan or traditional Medicare. Now there is a looming threat to privatize traditional Medicare with a new program, ACO REACH — Accountable Care Organization Realizing Equity, Access, and Community Health.

Starting this coming Jan. 1, ACOs will “align” traditional Medicare beneficiaries. It is likely not clear to patients (or their doctors, for that matter) that this is happening and what they are getting into. Many of the sponsors of these ACO programs are the same bad actors who have fraudulently wrung billions out of Medicare Advantage.

We must protect traditional Medicare. This is our uniquely American problem: Too much profit is being extracted, and not enough healthcare is being delivered.

Robert Stone, MD, is a physician practicing palliative medicine in Bloomington. He is the Director of Medicare for All Indiana.

This article originally appeared on The Herald-Times: Columnist argues original Medicare is the most transparent option