Every year, millions of Americans turn 65 and face a key decision that will affect their health care costs for the rest of their lives: Medicare or Medicare Advantage.
As many people approach this birthday, Amy Gage of St. Paul, Minn., is shocked when her mail is flooded by the day with sales of Medicare-linked insurance plans.
It was a matter of concern that she was reaching the age she once called old. She overcame her panic and opted for a moderately priced Blue Cross Blue Shield Medicare Advantage plan and doctors she trusted.
Now 66, she’s struck again – this time by sudden illnesses: osteoporosis, a deteriorating wrist and arthritis in her left finger. As a result, she realizes that she uses more of her Medicare insurance than she planned, and is rethinking it.
“There’s no way to put frosting on the cake,” she said. “I started to see my body breaking down.”
While her Medicare Advantage plan is good so far, she can switch to traditional Medicare and a supplemental plan for more doctor freedom when open enrollment hits in October.
Gage is not alone. Most people don’t fully appreciate the impact of their Medicare choices until they are sick. Many people decide to have a speep at 65, which prevents them from seeing senior doctors for serious problems later on.
“Choosing Medicare plans is complicated, and once people do, they don’t want to do it again,” said Julie Kubanski, deputy director of the KFF program on Medicare policy. But people don’t think about their future needs and realize the limits of their (doctor and hospital) network only when they have a medical problem.
Only 29% of Medicare enrollees review their plans and only 10% switch during the annual open enrollment period, according to the KFF study. Switching becomes more complicated for people who want to leave a Medicare Advantage plan and enroll in traditional Medicare and a supplemental Medigap insurance plan.
If you enroll in a Medigap plan at age 65 or go on Medicare Part B for the first time, the insurer must accept you without asking health questions. But after passing this window, the insurer has the right to charge higher premiums or deny coverage altogether to retirees with health problems.
Even getting a knee replacement can prevent someone from switching from a Medicare Advantage to a Medigap policy, says Ari Parker, a Medicare instructor at Chapters and author of the Medicare Handbook.
Choosing Wisely and Healthy Matters When You’re Young is Harold Stankard, president of Fidelity Medicare Services, a division of the financial services company. “If you don’t get sick, the savings are real,” he says, in Medicare Advantage plans. But be aware of the risks: Wealthy people want to buy Medigap supplements for peace of mind.
Melinda Cowhill, founder of Medicare consultant 65 Incorporated, suggests that her former client, who died at age 70 of cancer after a long and unsuccessful battle, find her life-saving Medicare Advantage plan.
When the woman was 65, she “looked young, felt young, and you wouldn’t imagine she was sick,” Caughil recalls. Therefore, Caughil did not receive the recommended Medigap Plan G because patients have the freedom to choose the best care at a given price. Instead of spending $120 a month on Medigap premiums, Jean chose a Medicare Advantage plan with a lower monthly premium.
A few years later, she was diagnosed with cancer and could not get Medicare Advantage plan insurance to pay for the treatment doctors recommended. “She was debilitated from her illness and overwhelmed by the endless calls and rejections,” Caughil said.
In the end, the woman took what Caughil called the “nuclear option.” She moved from Wisconsin to Illinois to get into a new insurance plan and see a top cancer doctor.
She took advantage of a loophole in Medicare rules: If you leave a Medicare Advantage state, you can get Medigap insurance without a prescription—even if you’re already sick. Her action is too late. She died soon after and her ordeal is not unique, Caughil said.
Medicare Advantage plans limit health care utilization by requiring patients to see certain doctors and get pre-approval from insurance companies for treatments, drugs and procedures, according to KFF. If patients go to doctors outside the plan’s network, they must cover most of the out-of-pocket costs, which can top $10,000 a year.
Research by David Meyers, an assistant professor at Brown University, found that in 2021, the top-rated doctors in Medicare Advantage plans have narrow networks of doctors, from primary care to cardiologists and psychologists. And in the year A 2020 study of hospital admissions in 2016 found that Medicare Advantage patients tended to go to average-quality hospitals rather than high- or low-quality ones.
In the year In 2022, the US Office of Inspector General found that the process of requiring pre-approval for doctor-recommended care is often putting patients at risk. Due to lengthy approval processes, patients missed out on time-sensitive care and were often denied care that doctors thought was necessary. About 13% of the denials analyzed by the inspector general were for treatments that traditional Medicare and Medigap plans would have covered.
Amid such delays, patients may abandon Medicare Advantage and revert to traditional Medicare, which covers approximately 80% of medical costs. But without a Medigap plan, patients can still be hit with huge bills in addition to basic Medicare.
“We want to make it clear to people,” Stankard said. “Even if you’re sick, you’ll receive Medicare Supplement initially, but you may not be able to switch later.”
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