Saturday, April 20, 2013

The Media Trivialize Medicare Advantage

I wish they knew how to stop.

Here’s a recent example from the April 19 Wall Street Journal Page B4. [subscription required]

In its 6th paragraph, the article states:

“The Medicare Advantage plans at issue typically combine basic Medicare benefits with extras, such as gym memberships.”

This statement trivializes Medicare Advantage by failing to describe the real importance of Medicare Advantage plans.  It’s a common media failure, particularly disappointing when parroted in the WSJ.

The truth is, Medicare Advantage benefits for medical care are much superior to basic Medicare (Part A and Part B).  The media almost never explain this.  They mention “gym memberships” instead.  As a result the administration intent to reduce funding for Medicare Advantage might seem reasonable when, in fact, it's not.

Ask yourself:  would seniors drop their basic Medicare and enroll in Medicare Advantage for something so trivial as a gym membership?  Of course not.

Something else explains why 25% of all Medicare-eligible individuals -12-14 million people - have voluntarily enrolled in Medicare Advantage plans.

The “something else” is that Medicare Advantage is much better insurance than basic Medicare (Part A and Part B).

Seniors who only have basic Medicare risk bankruptcy.  Oh, sure we can buy a “Medicare Supplement” plan to get additional coverage  - at our own expense.  But Medicare Supplement is not cheap.   Basic Medicare plus a typical Medicare Supplement plan can easily run to more than $300 per month, per person.  Why choose that when Medicare Advantage plans typically cost less than $300 per month, especially when offered thru a former employer?

In addition to the monthly premium cost, basic Medicare Part A requires a copay equal to $1,184 per hospital admission. Part B requires an additional $147 annual deductible – after which Medicare pays 80% of remaining allowable covered expenses (like all insurance, not all expenses are allowed or covered so the effective percentage usually works out to less than 80%).  Medicare enrollees pay the difference WITHOUT LIMIT; this means catastrophic expenses can bankrupt seniors who have only basic Medicare.  Basic Medicare is such bare-bones coverage that it would not qualify to be offered on the State Exchanges under ObamaCare.

By contrast, Medicare Advantage plans normally have only one deductible and normally reimburse at 80% up to an annual limit, after which Medicare Advantage pays 100%.   In my case the annual deductible is $300 and the most that I can pay in any year is $3,000.  That’s real insurance.

The media ignore these facts.  Maybe it’s because they take a little time to describe, and require a little thought to understand.  Whatever, the media act as though they believe people who don’t know, don’t care.  Thus they trivialize Medicare Advantage.

I think it’s really important for everyone to know the real deal so they can make a good decision for themselves and their families (and so politicians can’t blow smoke at them).  As it is, I think the media deceive people to believe that Medicare Advantage plans should be de-funded because they offer nothing more than a few “extras” like gym memberships.

This is how the media trivialize Medicare Advantage.  They are sadly mistaken.
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