All of the proponents of Obamacare extol the necessity of “reforming” (by which they mean killing) Medicare Advantage. Most people have no idea how this program operates or what Obamacare’s changes to it will mean to the millions of seniors covered by it. Here’s one example that spells it out:
I listened to your interview with Jonathan Cohn last night and not only did he have no specifics, but neither did you.I recently (effective Oct 1) signed up for an Advantage HMO plan after three months of research. I pay nothing extra for the plan, only the $96.40 for Medicare B.
Here’s what I get extra by signing up for Advantage HMO:
Under Medicare A, if I go into a hospital I would pay the first $1,068 and Medicare pays the balance for the first 60 days. For the next 30 days, I would pay $267 a day ($8,010) and Medicare pays the rest. For the next 60 days – a one-time lifetime benefit – I would pay $534 a day ($32,040) and Medicare pays the rest. After that, I would pay everything for as long as I remain in the hospital.
Under Medicare Advantage HMO, I pay $100 per day co-pay for the first 5 days (maximum of $500) and the insurance company pays the rest. For the first year, my out-of-pocket cost is $500 vs. a minimum of $41,118.
Under Medicare B, I would pay the first $135 for doctor services and 20% – 25% (depending upon services) of everything over that.
Under Medicare Advantage, I pay a $5 co-pay for my Primary Care physician visits, a $25 co-pay for a Specialist visit, and $100 co-pay for outpatient surgery and hospital services and nothing after that.
Under Medicare D, I have to pay a fairly large premium for drug coverage.
Under Medicare Advantage HMO, Medicare D is included at no additional cost.
For additional – but modest – premiums, you can sign up for other types of Medicare Advantage such as a PPO if your doctor and hospital are not a member of the HMO model (mine were).
So, essentially, the private insurance company gets paid a flat fee (based upon bids) by Medicare as a premium for taking over the administration and risks, adds substantial additional benefits to induce seniors to sign up, and still makes a profit. Can anyone say efficiency and eliminate of fraud and abuse?
Apparently, it is this profit that has President Obama so upset that he calls it a “subsidy” and he wants to “save” money by killing Advantage and dumping all of us back into regular Medicare, with catastrophic costs for any of us who beccome seriously ill.If Obama kills MediCare Advantage and I don’t want to take the high deductible risks of regular Medicare, I will have to buy a MediCare Supplement (MediGap) policy at a current price of $203 per month for comparable coverage (in addition to my continuing $96.40 per month for MediCare B). This premium will increase as I age. So ObamaCare will cost me at least $2,436 a year to avoid the limitations of regular Medicare.
He might get away with it because almost nobody except the 9 million seniors who have done their homework understand anything about Medicare Advantage (or have even heard of it), including President Obama!