November 10, 2022

Traditional Medicare or an Advantage Plan?

Medicare Advantage or traditional Medicare with supplemental insurance: which should you choose?

A compelling reason so many 65-year-olds are flocking to Medicare Advantage insurance policies is that they tend to have significantly lower premiums than enrolling directly in traditional Medicare. Retirees are also inundated with advertisements on television, online and in the mail urging them to sign up for the Advantage plans, which sometimes cover vision and dental care.

But the premium alone is a superficial test for such a consequential decision. Traditional Medicare plans combined with a Medigap or Part D drug plan might, in the end, be less costly. Differences in the quality of care and the out-of-pocket costs can weigh more heavily over the long haul as retirees get older and their health declines.

The federal government spent $321 more per person in 2019 on Medicare benefits in Advantage plans than on each person enrolled directly in traditional Medicare, according to Kaiser. “The growing role of Medicare Advantage and the relatively high spending on this program raise the question of how well private plans serve their enrollees,” Kaiser said.

To shed light on the advantages and disadvantages of each route, Kaiser’s researchers combed through more than five dozen academic studies and packaged them into a report comparing the care provided under Medicare Advantage policies and traditional Medicare.

Kaiser, a healthcare non-profit, found that both choices had some important things in common, including similar levels of patient satisfaction with care, wait times, care coordination, and the ability to find a doctor or specialist.

Medicare Advantage plans are separate insurance policies, and the federal government pays the insurance company for some of the care. Traditional Medicare in this report covers people who pay the federal Medicare premium for Part A and B coverage, and people who enroll in Medicare and also buy a Medigap supplement or Part D drug policy from an insurer.

A decision made at 65 isn’t irreversible. But most retirees tend to stay put once they choose between an Advantage insurance policy and traditional Medicare. It’s also important to remember that migrating from a Medicare Advantage policy to a Medigap supplement is more difficult than going from Medigap to Medicare Advantage.

Here’s a rundown of the most salient differences in cost and care in Kaiser’s summary. But this is a complicated decision, and many of the findings are subtle. So read the full report to understand the nuances. …Learn More

January 26, 2021

ACA Eased the Financial Burden on Families

The Affordable Care Act (ACA) has reduced families’ medical costs significantly.

The ACA’s main goal was to provide coverage for the first time to workers who lack employer health insurance. But the expansion of free or subsidized health care to millions of parents with low and modest incomes has improved their financial stability and freed up money for their families’ other critical needs, concluded a new University of California at Davis study.

The main way the ACA expanded coverage was by giving states the option of providing Medicaid to workers earning up to 138 percent of the federal poverty level. The law also increased the number of children with health insurance, because federal and state outreach during the Medicaid expansion raised parents’ awareness of two separate insurance programs that had long been available to children: Medicaid and the Children’s Health Insurance Program. To help families with modest incomes, the health care law put a cap on their annual medical spending.

Prior to the ACA’s passage, out-of-pocket medical costs were a high financial burden for 15 percent of U.S. families. That has fallen to about 10 percent of families in the years since passage, the researchers said.

What qualifies as a high cost burden depends on the family’s income. One example: the researchers determined that a family earning $75,000 had a high cost burden if they paid more than 8.35 percent of their income for out-of-pocket deductibles and copayments.

However, the study is not a current picture of the situation, because it was based on data from health care spending surveys in 2000 through 2017, prior to the pandemic. During the past year, millions of people were laid off and lost their employer health insurance when they may need it most.

But the ACA’s benefits are clear, the researchers said. Another aspect of the reform was to allow workers who earn too much to qualify for Medicaid to purchase subsidized private health insurance on the state exchanges. The law capped the total that workers spend on health care – once they reach the cap, their care is fully covered. …Learn More