Since it began in 1965, Medicare has provided a basic level of health insurance for the vast majority of seniors. That system evolved into Medicare Part A, which includes hospitalization and rehabilitative care after hospitalization and Part B, which includes doctors visits, durable medical equipment and certain home healthcare services. The Medicare system is not perfect, but it is a functional and predictable basic health insurance program for everyone.
With the Balanced Budget Act of 1997, the government attempted to privatize Medicare with the creation of Medicare Part C plans, called Medicare+Choice, which would be the private insurance versions of Medicare Parts A and B.
These private insurance health plans for Medicare did not catch on very well until the government mandated Medicare Part D prescription coverage with the Medicare Prescription Drug Improvement and Modernization Act of 2003, effective January 1, 2006. This act changed the name of Medicare Part C from Medicare+Choice to Medicare Advantage.
At that time, many individuals who signed up for Medicare Part D prescription coverage, also unknowingly signed up for a Medicare Part C Advantage plan. If you have signed up for a Medicare Advantage plan, you are no longer covered by Medicare Parts A and B. Your Medicare coverage is now governed by the private health insurance contract you entered into with the insurance company.
In a recent continuing legal education panel discussion, a number of experts who have reviewed numerous Advantage plans in Michigan found that every plan was different and some insurance companies had multiple different plans. Not one of the experts had found a Part C Advantage plan that was as comprehensive and well run as the government Medicare Parts A and B programs. I heard about one Medicare Part C Advantage plan that provided only 20 days of rehabilitative services after a hospital stay instead of the 100 days provided by Medicare Part A.
Not only do the Part C Advantage plans cover less than Parts A and B, if you have Part C, you can not sign up for a Medicare supplement health insurance policy, which is also called Medigap coverage. You are stuck with the coverage in the Advantage program. Anything that is not covered by the Medicare Part C Advantage plan must be covered out-of-pocket by you.
The current big push for Medicaid Part C Advantage plans which has expanded it, is the jumping on the Medicare Part C bandwagon by major unions and large employers to provide retiree healthcare. Health care costs for retirees are skyrocketing. A way to limit those costs is to provide a Medicare Part C Advantage plan which has the appearance that the plan is like the private health insurance that was previously provided to the retirees.
Why is there such a big push for these Medicare Part C Advantage programs? Follow the money. It is estimated that the switch from traditional healthcare plans to Medicare Advantage plans for retirees has resulted in savings nationwide by these unions and employers of billions of dollars, annually. In addition, there are a number of Medicare Part C Advantage providers nationwide that have been shut down or indicted for deceptive trade practices or other frauds.
You may think that you have traditional Medicare Parts A and B because you have the red, white and blue Medicare card that says Part A and Part B. However, if you have a health insurance card that says somewhere on it “Advantage”, the likelihood is that you do not have Medicare Parts A and B, but you have a private Medicare Part C Advantage insurance plan that will be governed by your insurance contract.
If you have a Medicare Part C Advantage plan, you should contact your health insurance carrier as soon as possible and ask for a copy of the insurance contract, including all your covered expenses, to review.
If you have some sort of condition or ailment which is not covered by your particular Medicare Part C Advantage program, you should think about changing Medicare Part C programs during the annual enrollment period which is January 1 through March 31 of each year. Currently we are in a lock out period until then.
If your Advantage Plan coverage is less than traditional Medicare Parts A and B, you should seriously consider opting out of your Medicare Part C Advantage plan. The monthly cost of Medicare Part A (usually free), Part B (usually $96.40) and a Medicare supplement (can be about $110.00), may be less than the co-pays under your Medicare Part C Advantage plan.
Health care costs are often times the largest expenses for seniors today. Don’t short change yourself. Make sure you have adequate health care coverage.
By: Matthew M. Wallace, CPA JD
Published edited August 16, 2009 in The Times Herald newspaper, Port Huron, Michigan as: No benefits to Medicare C Advantage plan