Medicare Advantage plans can seem like the best deal around, and they often are. With a continuing federal subsidy, the plans can wrap together all your insurance needs – basic Medicare (Parts A and B), a Part D drug plan, and protection against catastrophic out-of-pocket health expenses. They often provide additional coverage, such as health club memberships, that basic Medicare does not offer.
You can get more complete coverage from basic Medicare with a package that includes Parts A and B, a stand-along Part D drug plan, and a Medigap supplemental insurance plan. But you have to deal with three different insurance providers, raising flurries of paperwork and often confusing problems of who’s paying for what. And the expenses of these traditional Medicare plans will very likely be a lot more expensive than the costs of Medicare Advantage.
The only things preventing me from jumping on the Medicare Advantage bandwagon permanently are that the plans have two serious coverage restrictions. First, they usually only cover you in the geographic area near your home. Traditional Medicare will cover you anywhere in the United States. Second, they usually limit you to using only those doctors and hospitals in the plan’s provider network, and either do not cover other healthcare providers or sock you with steep out-of-network charges. Traditional Medicare lets you use any health providers who accept Medicare, and there are no upcharges (although there may be add-on charges for some doctors who see Medicare patients but don’t accept Medicare’s rates).
I urge consumers to carefully review all the pluses and minuses of any Medicare package. In the area of Medicare Advantage networks, here is a cautionary tale plucked from an Ask Phil column as it appeared on the PBS Making Sen$e website:
Karen: I recently enrolled in a Medicare Advantage (MA) plan, partly because a physician that is part of a university-affiliated practice was listed in the network directory. I was a patient of a doctor in the university practice who is not in the network, but I wished to stay in the university practice for continuity of care. The day my coverage began, I attempted to make an appointment with the physician, but was told by the insurance billing office that none of the physicians in their office is in the network! I spoke with a customer service representative from the MA plan and explained the inaccurate, discrepant information in its online directory. When I inquired about disenrolling, I was told I would have to write a letter with my reasons and, further, that if I switched coverage to another plan, I would have to pay a penalty for a lapse in my Part D drug coverage.
I do not trust the information I am receiving. Is this information accurate? How do I avoid penalties? How do I avoid a lapse in coverage? I don’t want to pay out-of-network charges to continue seeing a physician in the university practice. Is this grounds for changing to another MA plan? It seems unfair that when you enroll in an MA plan you can face a penalty or even lack of any insurance due to the plan’s mistakes.
Phil Moeller: Karen’s letter describes the kind of problem that has given MA plans a bad public image. The plans are increasingly popular, and now serve a third of all Medicare enrollees. They often provide more complete coverage than basic Medicare and usually cost less than having basic Medicare, a stand-alone Part D drug plan, and a Medigap supplemental plan.
A goodly amount of their cost savings stems from their requirement that plan members use doctors and hospitals in their provider networks. Here, the accuracy of provider directories has been a problem for some Medicare Advantage plans. They have been criticized for this problem and are taking steps to improve the completeness and accuracy of the directories. Unfortunately, it’s very hard if not impossible for consumers to know ahead of time which plan networks are likely to be inaccurate. For that reason, I urge people to call their preferred health care providers ahead of time, and ask them if they are in a plan’s network.
As to your exposure to late-enrollment penalties, I don’t have enough information from you about the timing of your application for the MA plan to be able to comment with certainty on whether the MA plan was justified in what it told you.
If your enrollment in Medicare was the result of you turning 65, your initial enrollment period should have been seven months, including the three months before your birthday, your birthday month, and three months after your birthday. If your enrollment was the result of leaving a job after you had turned 65, you should qualify for a special enrollment period lasting eight months after the end date of your employer health coverage.
I mention this because your window for getting a Part D drug plan might still not have closed, meaning you would not face late-enrollment penalties if you could get a new Part D plan before your enrollment period ended. Part D penalties begin kicking in once your enrollment windows are closed and you’ve gone 63 days without Part D coverage. So, even if your enrollment window has closed, disenrolling from your current Part D plan might not trigger a late-enrollment penalty if you can obtain new coverage within 63 days of disenrolling. Of course, I don’t know if any of this is relevant to your situation.
This still leaves you with the broader issue of how to hold the plan accountable for misrepresenting the information in its provider directory. In the pro-consumer world I wished we all lived in, this would be a snap. In the real world, it is anything but that. Plans have a lot of leeway in avoiding accountability for these kinds of decisions. I’ll get to possible remedies in a moment.
It seems to me that your first order of business is to find a better package of Medicare coverage. This would include finding a stand-alone Part D drug plan that will take effect quickly and thus allow you to avoid the late-enrollment penalty. The penalty, by the way, is only 1 percent a month tacked on to your Part D premium. So, it’s not a lot of money. But it lasts the rest of your life and would be nice to avoid.
I would also call Medicare (1-800-MEDICARE) and find out how quickly your basic Medicare coverage would kick in, and thus how soon you could see your preferred doctors and be covered. Get ready for some frustration here, as it can take a while for this coverage to take effect.
In the interim, you may face the unpleasant choice of either paying out-of-network rates or going without care.
Once you’ve attended to these needs, you can explore remedies for your plan’s mistakes. I work with several nonprofits that provide consumer Medicare advice, and might be able to work with you to redress the problems you’ve encountered. The State Health Insurance Assistance Program (SHIP) is often the first place to go, although it is more focused on explaining how Medicare works than dealing with private insurance companies. The other two are the Medicare Rights Center and the Center for Medicare Advocacy.