Medicare Advantage plans are health plans offered by private insurance companies who have contracted with Medicare to sell and administer these plans to Medicare beneficiaries. Touted to "fill the gaps" of Original Medicare as well as provide additional benefits, Medicare Advantage plans are enrolling increasing numbers of Medicare beneficiaries. However, many enrollees have faced barriers, including restricted access to providers and higher out-of-pocket expenses than if they had remained in Original Medicare. Some retirees are pushed into Medicare Advantage plans as their retiree health plan by employers who are trying to cut their health care expenses.
Even Medicare beneficiaries who have not enrolled have been subject to marketing misconduct by agents who receive high commissions for selling these plans. "Too often, the best plan for the agent is sold rather than the best plan for the beneficiary," Mr. Lipschutz pointed out.
Lipschutz’ testimony illustrated how beneficiaries have been harmed by using actual cases from California’s Health Insurance and Counseling and Advocacy Program (HICAP), the state Medicare counseling program. California Health Advocates works with HICAP to resolve complex cases and provides technical support and training to the counseling network.
One especially egregious case example relates how cancer patients gave up their Medigap policies and joined a Medicare Advantage plan because they were lead to believe that the Medicare Advantage plan worked the same way or better. The cancer patients discovered later that they had to pay a 20% coinsurance for chemotherapy and radiation, which would have been covered had they continued with their Medigap policies. This scenario also points out the irony that not only do Medicare Advantage plans fail to "fill the gaps" in Original Medicare, but many Medicare Advantage plans have their own "gaps" that insurance companies try to fill with innovative new products.
California Health Advocates wrote about these new "gap" products in an issue brief, "There’s A Hole in the Bucket: New "Gap" Products Being Sold to Fill-in Medicare Advantage Deficiencies," which was published in November 2007 and is available online at www.cahealthadvocates.org.
Medicare beneficiaries who are encountering problems with their Medicare Advantage plans or who have been the target of agents trying to sell them Medicare Advantage plans or new "gap" products should contact their local HICAP office by calling 1-800-434-0222 or locating the closest HICAP office by visiting www.calmedicare.org.
California Health Advocates presented several recommendations, including:
- Create standard benefit packages for Medicare Advantage and Part D plans, such as requiring that Medicare Advantage plans charge no more cost-sharing for services than what is charged under Original Medicare, and limiting the number of plans offered in a given geographic area.
- Rescind the statutory preemption that prevents states from enforcing state laws on consumer protections and the marketing of insurance products.
- Stop overpayments to the Medicare Advantage program and pay only as much as is paid to providers under Original Medicare.
California Health Advocates and other advocates call upon Congress to carefully scrutinize the Medicare Advantage program that threatens the stability and integrity of the entire Medicare program.
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California Health Advocates is dedicated to advocacy and education efforts for Medicare beneficiaries in California.
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California Health Advocates
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