Is Medicare Advantage Really an Advantage?

       

We’ve heard a whole lot lately about seniors losing many of their Medicare Advantage perks like dental payments and hearing aids. The theory goes that if the Democrats have their way, these types of subsidies will be cut out from under seniors.

While this is a good theory as far as it happens to go, there is another side of the coin that not a lot of people take the time to examine. The grass is always greener on the other side of the septic tank and thus billions of Medicare dollars have been channeled into massive marketing schemes to attract more seniors to the “privately” administered Advantage plans – the ones that are the “other” option to government provided (and less expensive) Medicare.

This is a no-brainer. If you want to save money and get good health care coverage, then stick with the government administered Medicare plans. Or should you? The government subsidized benefits seniors get who are on Advantage plans are real, and they may very well be in danger of going south during the health care changes. Does this mean there isn’t something to replace those benefits? Fair question and one that needs some research based on the theory that when one door closes another one opens.

Granted, there are some major differences between the House version of the overhaul and the Senate version of the overhaul. However, both the bills do cut payments to private Medicare Advantage plans. This is largely because these are costing the government about 14% more than traditional Medicare.

So what will the landscape possibly look like when the dust eventually settles? This is hard to tell, because while there are benefits being given, there are trade-offs on the other side. For instance, the AARP (who advocates for Medicare Advantage cuts – after all it IS an insurance company) indicates it’s like some seniors may see an increase in the premiums; ultimately have their benefits cut; or see some plans shut down.

While this may be a mixed message or blessing in disguise (it’s hard to really say either way) ultimately the standard Medicare plans with supplements may just be the answer. This is applicable even if a senior may have to pay a bit more for a supplement. It likely wouldn’t be any more than what they are paying for Medicare Advantage when those rates increase soon.

Interestingly enough, a Government Accountability Office report released last year found that Advantage plans could actually cost up to 84% “more” than traditional Medicare. Perhaps it’s time to re-think the whole Medicare Advantage versus traditional Medicare scenario.

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