Advantage plans cost more than regular Medicare

[Happydaz]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!

[rjm1cc]

Mine does not if you refer to the monthly premium. It could if you include deductibles and co pays and are a heavy user of the plan.

[Altavia]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!

True for routine healthy care but the difference is made up on serious illness where Advantage plan provides lowest reimbursements to providers.

[retiredguy123]

I don't know where to start. Have you considered the Federal salaries and benefits to process all of the Medicare Part B claims? And, have you considered that the Medicare Advantage plans are managed by private companies who have a profit a motive to reduce fraudulent claims? What incentive do Federal employees have to deny fraudulent claims? And, have you considered the fact that a patient, who has Medicare Part B and a Medicare supplement has no copay and, therefore, has no incentive to shop for the lowest cost option, and no incentive to reduce treatments or expensive medical supplies or devices. Medicare Advantage plans have all of these incentives to moderate the cost of medical care.

[bandsdavis]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!

I would be interested to know where you got statistics to back this up.

[Happydaz]

Let me clarify my topic. I am not talking about how much a Medicare Advantage plan or Medicare-MediGap plan costs an individual patient nor how much these plans reimburse a medical provider or hospital. I am referring to the cost these two plans cost CMS, the government Medicare program that our Medicare taxes and other funds are used to pay out for claims. What it comes down to is Medicare Advantage plans cost the Medicare fund more than regular Medicare. Medicare Advantage plans were supposed to cost less but due to unexpected bonuses and other costs, Medicare has had to pay $321 (recent 2019 data) more per patient than regular Medicare. Since Advantage plans restrict doctor choice, drug choice, require specialist referrals and were paid a set amount of money per patient, they were seen as a way for the government to save money over regular Medicare. Advantage plans are administered by insurance companies and they are extremely profitable. The Advantage plans also offer a lot of freebies, like low premiums and low co pays, free gym memberships, free over the counter drugs, etc. so they are attractive to individuals signing up as they may cost them less up front, but our Medicare fund pays more. This may mean that Advantage plans may come under scrutiny by Congress.

[MartinSE]

Let me clarify my topic. I am not talking about how much a Medicare Advantage plan or Medicare-MediGap plan costs an individual patient nor how much these plans reimburse a medical provider or hospital. I am referring to the cost these two plans cost CMS, the government Medicare program that our Medicare taxes and other funds are used to pay out for claims. What it comes down to is Medicare Advantage plans cost the Medicare fund more than regular Medicare. Medicare Advantage plans were supposed to cost less but due to unexpected bonuses and other costs, Medicare has had to pay $321 (recent 2019 data) more per patient than regular Medicare. Since Advantage plans restrict doctor choice, drug choice, require specialist referrals and were paid a set amount of money per patient, they were seen as a way for the government to save money over regular Medicare. Advantage plans are administered by insurance companies and they are extremely profitable. The Advantage plans also offer a lot of freebies, like low premiums and low co pays, free gym memberships, free over the counter drugs, etc. so they are attractive to individuals signing up as they may cost them less up front, but our Medicare fund pays more. This may mean that Advantage plans may come under scrutiny by Congress.

$321 per what? Day? Month? Year? Doctor Visit?

I no longer use Medicare so, I can't speak to your numbers, other than to say, Medicare isa. good example of how a half ass'ed attempt to provide Healthcare works and costs (not very well). The VA which I now get all my healthcare through is a GOOD example of what a universal healthcare system should/could work.

[mtdjed]

Let me clarify my topic. I am not talking about how much a Medicare Advantage plan or Medicare-MediGap plan costs an individual patient nor how much these plans reimburse a medical provider or hospital. I am referring to the cost these two plans cost CMS, the government Medicare program that our Medicare taxes and other funds are used to pay out for claims. What it comes down to is Medicare Advantage plans cost the Medicare fund more than regular Medicare. Medicare Advantage plans were supposed to cost less but due to unexpected bonuses and other costs, Medicare has had to pay $321 (recent 2019 data) more per patient than regular Medicare. Since Advantage plans restrict doctor choice, drug choice, require specialist referrals and were paid a set amount of money per patient, they were seen as a way for the government to save money over regular Medicare. Advantage plans are administered by insurance companies and they are extremely profitable. The Advantage plans also offer a lot of freebies, like low premiums and low co pays, free gym memberships, free over the counter drugs, etc. so they are attractive to individuals signing up as they may cost them less up front, but our Medicare fund pays more. This may mean that Advantage plans may come under scrutiny by Congress.

I thank you for bringing this topic to attention. I did a Google search and found an interesting article which describes the process. As any article could be subject to being biased and incorrect, one must be suspect to the article and to interpretation. The article is on this link.

Why Medicare Advantage costs taxpayers billions more than it should – Center for Public Integrity (https://publicintegrity.org/health/why-medicare-advantage-costs-taxpayers-billions-more-than-it-should/)

So, my simplistic interpretation is "Fraud", not by users or providers, but rather by the Medicare Advantage Programs providing the networks. Apparently, the initial program was meant to eliminate fraud by individual claims and this program was conjured up to eliminate that. Seems that the original program was a one cost covers all and some Advantage programs cherrypicked participants to sign up only the healthiest to minimize costs. The program was then changed to add a risk factor for severity of participants needs. Supposedly, that has been abused by some Advantage programs by getting higher funding for participants with higher risks.

Seems that the other benefits offered such as freebies are not the driver since they are not covered by Medicare.

Again, this is my interpretation of the article (which may or may not be true). I would expect the normal on line experts will be around to correct my interpretation and the source that I found.

I am not a user of Medicare Advantage. I have original Medicare and a Supplement program which also now pays for Gym membership. Supplement payment is now about $160/Month. Gym membership was $55/Month and now is free, covered by the Supplement which is still $160 / Month. Hmm! Wonder where that extra $55 came from. Maybe the theory is that I am heathier and require less medical care

[Happydaz]

There is a recent article published in Forbes Magazine (June 15, 2022) on Medicare Advantage Plans. It says Medicare Advantage patients cost on average 4% more per year than what an average patient costs on traditional Medicare. The article has a lot of other interesting information as well. I am no expert and and I was only posting this because I was so surprised when talking to my friend that these Advantage plans weren’t saving money over traditional Medicare.

[donfey]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!

Sounds like a sales pitch to me. We use Medicare Advantage, exercise it through (But not restricted to) The Villages Healthcare, and spend less that the stated $321 out of pocket PER YEAR! Everyone is different, of course, and each should do their own homework.

[Happydaz]

Sounds like a sales pitch to me. We use Medicare Advantage, exercise it through (But not restricted to) The Villages Healthcare, and spend less that the stated $321 out of pocket PER YEAR! Everyone is different, of course, and each should do their own homework.

You are talking about your personal cost of a Medicare Advantage plan. (Yes many Advantage plans have lower up front costs)

I am referring to the cost of these plans to the Medicare Program, the huge government fund that is supported by the Medicare tax on wages and other monies. This is where all the money comes from to pay for Medicare recipients healthcare. It is a huge government expenditure and it needs monitoring so costs don’t spiral out of control.

[mydavid]

$321 per what? Day? Month? Year? Doctor Visit?

I no longer use Medicare so, I can't speak to your numbers, other than to say, Medicare isa. good example of how a half ass'ed attempt to provide Healthcare works and costs (not very well). The VA which I now get all my healthcare through is a GOOD example of what a universal healthcare system should/could work. The VA is set up to give health care to veterans health care according to their classification and type of injury they received. As a DAV and had no health care when I moved to FL 20 years ago they took care of all my medical needs, after I was old enough for Medicare, I only use them certain things, both have worked well for me.

[spinner1001]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!

It’s complicated. There are some reasons the government is fine with paying more per patient with Advantage plans over traditional Medicare. For instance, better health outcomes (after controlling for medical conditions) and medical innovation are common benefits arising from Advantage plans on average.

Lots have been written about this comparison from more serious sources. It’s not fair to simply compare cost per person. Consider costs AND (long term) benefits of each. For example:
Medicare Advantage: A Policy Primer | Commonwealth Fund (https://www.commonwealthfund.org/publications/explainer/2022/may/medicare-advantage-policy-primer)

[Marine1974]

$321 per what? Day? Month? Year? Doctor Visit?

I no longer use Medicare so, I can't speak to your numbers, other than to say, Medicare isa. good example of how a half ass'ed attempt to provide Healthcare works and costs (not very well). The VA which I now get all my healthcare through is a GOOD example of what a universal healthcare system should/could work.

What do you do if the VA can’t schedule you for a month ?
I like having a choice, I pay co-pays with the VA because of my income level .
With my supplemental and Medicare I only have a $208 deductible for the whole year . It is cheaper for me to see outside private local doctors I’ve been a patient of for decades . My Medicare part D is $16 a month and the majority of my prescriptions are free .

[allsport]

Mine does not if you refer to the monthly premium. It could if you include deductibles and co pays and are a heavy user of the plan.


You do not pay more, the government pays more to the program with the intent of cutting your costs by managing your care and not permitting you choice in your care. The program takes the money that should go to people who are signed up for the care. It is the first step in privatization and should never be chosen as your plan. They get the people with gimmicks that are not health related.

[Notsocrates]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!

You don't understand how it works.

CMS uses the premium it deducts from your Soc. Sec. benefit and pays private insurers to assume the risk of covering you. The insurers collect premiums, write policies and pay bills following Medicare standards.

[allsport]

I don't know where to start. Have you considered the Federal salaries and benefits to process all of the Medicare Part B claims? And, have you considered that the Medicare Advantage plans are managed by private companies who have a profit a motive to reduce fraudulent claims? What incentive do Federal employees have to deny fraudulent claims? And, have you considered the fact that a patient, who has Medicare Part B and a Medicare supplement has no copay and, therefore, has no incentive to shop for the lowest cost option, and no incentive to reduce treatments or expensive medical supplies or devices. Medicare Advantage plans have all of these incentives to moderate the cost of medical care.

Keep on drinking from that fountain, they have you fooled. The problem is the congress not the employees who will not permit drugs to be negotiated and thank the Repubs for living off big pharma because that is the root of the problem. The employees want fraud pointed out as badly as you do but congress is in the way. The VA negotiates drug prices, just saying. That part of the government got smart.

[jammaiora]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!
Medicare Advantage programs should cost more because retirees get more coverage - vision, dental, no cost primary doctor visits. Do some research to find out if overall in the end they save money for the system. By the way, both workers and employers contribute to FICA, so what's your point?

[Joeint]

I don't know where to start. Have you considered the Federal salaries and benefits to process all of the Medicare Part B claims? And, have you considered that the Medicare Advantage plans are managed by private companies who have a profit a motive to reduce fraudulent claims? What incentive do Federal employees have to deny fraudulent claims? And, have you considered the fact that a patient, who has Medicare Part B and a Medicare supplement has no copay and, therefore, has no incentive to shop for the lowest cost option, and no incentive to reduce treatments or expensive medical supplies or devices. Medicare Advantage plans have all of these incentives to moderate the cost of medical care.


Have you considered fraud in advantage plans
Billing for services not rendered.
Altering medical records.
Use of unlicensed staff.
Drug diversion (e.g. dispensing controlled substances with no legitimate medical purpose)
Kickbacks and bribery.
Providing unnecessary services to members.

[retiredguy123]

There is a recent article published in Forbes Magazine (June 15, 2022) on Medicare Advantage Plans. It says Medicare Advantage patients cost on average 4% more per year than what an average patient costs on traditional Medicare. The article has a lot of other interesting information as well. I am no expert and and I was only posting this because I was so surprised when talking to my friend that these Advantage plans weren’t saving money over traditional Medicare.
A regular Medicare patient with a supplement policy has zero copays when they receive almost any treatment. If the Government wanted to substantially reduce the cost of the program, they would require patients to have "skin in the game" by requiring copays and offering incentives for the patient to find less expensive treatments and to avoid unnecessary treatments..

I remember visiting my mother one time when she had a 6 foot high stack of blood sugar testing supplies in her kitchen. Her vision was so bad that she was not able to test her sugar level. But, since she had no copay, she had no reason to stop the deliveries, and she didn't know how to stop them anyway. During the last 4 months of her life, a primary care doctor visited her in the hospital or nursing home every day, 7 days per week, and billed Medicare for an office visit. My mother never hired this doctor, but assumed that she worked for the hospital. The doctor never prescribed anything or provided any treatment.

[rsmurano]

A supplement plan (plan f/g/n etc..) is far superior than advantage plans and will save you money each year.
The biggest thing that most people don’t know is that once you go with an advantage plan (say at 65), you probably won’t be able to switch to a supplemental plan in the future so your stuck with the advantage plan forever. If you have ANY precondition or have some issue the prior 2 years before applying for a supplement, they won’t accept me. I know it happened to me. I had a plan g supplement and when I moved to florida I went shopping for another plan g plan from florida. I didn’t get accepted even by the same company that I had the current plan g because I had some issues the prior months of applying. I was screwed. I did talk with my out of state plan g provider and they said I don’t need a new plan since any supplement plan is good country wide. Staying with my out of state plan, I’m saving over $50 a month over what a florida plan would cost

[mike519]

I don't know where to start. Have you considered the Federal salaries and benefits to process all of the Medicare Part B claims? And, have you considered that the Medicare Advantage plans are managed by private companies who have a profit a motive to reduce fraudulent claims? What incentive do Federal employees have to deny fraudulent claims? And, have you considered the fact that a patient, who has Medicare Part B and a Medicare supplement has no copay and, therefore, has no incentive to shop for the lowest cost option, and no incentive to reduce treatments or expensive medical supplies or devices. Medicare Advantage plans have all of these incentives to moderate the cost of medical care.


Medicare Is More Efficient Than Private Insurance

https://www.healthaffairs.org/do/10.1377/forefront.20110920.013390/

Medicare administrative costs are about 2% while private health insurance companies have 12% to 18% in administrative costs.


If we got rid of the private health insurers, we would save $500 billion a year just in administration costs.

[retiredguy123]

Have you considered fraud in advantage plans
Billing for services not rendered.
Altering medical records.
Use of unlicensed staff.
Drug diversion (e.g. dispensing controlled substances with no legitimate medical purpose)
Kickbacks and bribery.
Providing unnecessary services to members.
I don't disagree, but at least with the advantage plans, there is a profit motive, copays, and a financial reason to avoid unnecessary treatments. With regular Medicare, there are no copays, and the Government employees, who approve claims, have no incentive to reduce cost.

[kingofbeer]

$321 per year
The federal government spent $321 more per person for beneficiaries enrolled in Medicare Advantage plans than for those in traditional Medicare in 2019, a gap that amounted to $7 billion in additional spending on the increasingly popular private plans that year, finds a new KFF analysis.

[aldeana]

Generally claims are not processed by Medicare, but they contract with private companies that specialize in claims processing for Medicare, Medicaid, and other entities. In FL, it is done by First Coast Service Options, based in Jacksonville. They have been doing this for over 50 years. If you have a Medigap policy, the part not paid by Medicare usually gets automatically crossed over to the Medigap carrier. Another comment to an earlier statement: some Medigap policies DO have a copay. There have been concerns that Medicare Advantage plans end up costing Medicare more $$, but actual numbers are hard to find.

[Keefelane66]

Don't worry too much Sen Rick Scott proposal is to do away with Social Security and Medicare and raise taxes.
Examining Rick Scott's Claim That Medicare, Social Security Will Soon Go 'Bankrupt' - FactCheck.org (https://www.factcheck.org/2022/03/examining-rick-scotts-claim-that-medicare-social-security-will-soon-go-bankrupt/)

[skyking]

???? Traditional Medicare plans are administered by "Medicare Intermediares", often the state Blue Cross plan. The 2% is the government's cost to bill and maintain enrollment/eligibility records. Not comparable.

[skyking]

Have you considered fraud in advantage plans
Billing for services not rendered.
Altering medical records.
Use of unlicensed staff.
Drug diversion (e.g. dispensing controlled substances with no legitimate medical purpose)
Kickbacks and bribery.
Providing unnecessary services to members.

???? You have no idea how Medicare Advantage works.

1. They are paid a monthly per Capita amount not per service billed.
2. The plans do not maintain medical records. The contracted providers do.
3. If the plans are paid a fixed amount (based on age and sex of the beneficiary) they have no incentive to "provide unnecessary services" or medications.
4. Plans are typically paid 95% or less of average cost per beneficiary in the county of residence.

There is so much over utilization in healthcare that they can provide free extra benefits by managing utilization and quality.

[retiredguy123]

???? You have no idea how Medicare Advantage works.

1. They are paid a monthly per Capita amount not per service billed.
2. The plans do not maintain medical records. The contracted providers do.
3. If the plans are paid a fixed amount (based on age and sex of the beneficiary) they have no incentive to "provide unnecessary services" or medications.
4. Plans are typically paid 95% or less of average cost per beneficiary in the county of residence.

There is so much over utilization in healthcare that they can provide free extra benefits by managing utilization and quality.
Thanks. And, if the advantage plans are actually costing the taxpayers more money than regular Medicare as claimed, why doesn't the Government reduce the per Capita amount paid to the insurers?

[OhioBuckeye]

Anything I get online that’s a deal, it always seems like if it’s to good to be true it probably is. Seems like there’s always a catch to all deals. Some people don’t understand their explanation, which that’s my problem. But thanks for clearing that up for me!

[Rainger99]

I think this is the article that the OP was referring to. It is put out by the Kaiser Family Foundation.

Higher and Faster Growing Spending Per Medicare Advantage Enrollee Adds to Medicare’s Solvency and Affordability Challenges | KFF (https://www.kff.org/medicare/issue-brief/higher-and-faster-growing-spending-per-medicare-advantage-enrollee-adds-to-medicares-solvency-and-affordability-challenges/#:~:text=Medicare%20spending%20for%20Medicare%20Ad vantage,available%20to%20traditional%20Medicare%20 beneficiaries).

[Topspinmo]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!


IMO Heath care is so —— up in this country and government spends trillions of taxpayers money all pocketed by insurance and CEO’s millions in bonus. But the insurance industry knows who to pander to to get there way. IMO nothing going to change unfunded health care debt will continue to rise and money will be printed and flow.

IMO all private insurance Outlawed, need single payer to government. At least the government will be making the billions or trillions and not private insurance Ponzi schemes.

[Luggage]

Costs are in contracts and the government knows exactly what they're going to pay each year. If you don't like it you can write to your congressman. Another reason we have advantage plans is that the insurance companies need to get their hooks into some of the money we pay for medical for senior citizens that is the big problem in America between both sides of the aisle, one wants for private businesses to succeed the other one wants everything in government to be by the government.

[PugMom]

Sounds like a sales pitch to me. We use Medicare Advantage, exercise it through (But not restricted to) The Villages Healthcare, and spend less that the stated $321 out of pocket PER YEAR! Everyone is different, of course, and each should do their own homework.

same here. it covers everything we need from major surgery to walk-in visits. all i can say is it works for us

[Hardlyworking]

same here. it covers everything we need from major surgery to walk-in visits. all i can say is it works for us

This topic isn’t really about what you spend, it is about what Medicare spends.

[Davonu]

I’ll admit I haven’t read the entire thread, but it seems like a bit of a no-brainer…

Advantage plans provide coverage above regular Medicare. They are going to cost more.

[DDToto41]

I don't know where to start. Have you considered the Federal salaries and benefits to process all of the Medicare Part B claims? And, have you considered that the Medicare Advantage plans are managed by private companies who have a profit a motive to reduce fraudulent claims? What incentive do Federal employees have to deny fraudulent claims? And, have you considered the fact that a patient, who has Medicare Part B and a Medicare supplement has no copay and, therefore, has no incentive to shop for the lowest cost option, and no incentive to reduce treatments or expensive medical supplies or devices. Medicare Advantage plans have all of these incentives to moderate the cost of medical care.
Lets start by saying United Healthcare had an advertisement on tv that said they have 70,000 people to help 70,000,000 customers. At an average of $50,000 each that means $3,500,000,000 is paid out in wages before they pay anything else. For them to make a profit what will yours or the governments cost be?

[Keefelane66]

Lets start by saying United Healthcare had an advertisement on tv that said they have 70,000 people to help 70,000,000 customers. At an average of $50,000 each that means $3,500,000,000 is paid out in wages before they pay anything else. For them to make a profit what will yours or the governments cost be?
That's an estimated $3,500,000,000 rolled back into the economy isn't capitalism grand.

[NAB20]

Let me clarify my topic. I am not talking about how much a Medicare Advantage plan or Medicare-MediGap plan costs an individual patient nor how much these plans reimburse a medical provider or hospital. I am referring to the cost these two plans cost CMS, the government Medicare program that our Medicare taxes and other funds are used to pay out for claims. What it comes down to is Medicare Advantage plans cost the Medicare fund more than regular Medicare. Medicare Advantage plans were supposed to cost less but due to unexpected bonuses and other costs, Medicare has had to pay $321 (recent 2019 data) more per patient than regular Medicare. Since Advantage plans restrict doctor choice, drug choice, require specialist referrals and were paid a set amount of money per patient, they were seen as a way for the government to save money over regular Medicare. Advantage plans are administered by insurance companies and they are extremely profitable. The Advantage plans also offer a lot of freebies, like low premiums and low co pays, free gym memberships, free over the counter drugs, etc. so they are attractive to individuals signing up as they may cost them less up front, but our Medicare fund pays more. This may mean that Advantage plans may come under scrutiny by Congress.
Understood. Your original post was clear. It is interesting that when the federal government comes up with a plan that pushes services to the private sector, it becomes more costly for the taxpayers. It belies the theory that private sector is the better way to go with healthcare. It just adds more profit layers between the patient and the doctor. I also believe that the Advantage plan model has been the cause of so many doctors retiring as soon as they can.

[retiredguy123]

Lets start by saying United Healthcare had an advertisement on tv that said they have 70,000 people to help 70,000,000 customers. At an average of $50,000 each that means $3,500,000,000 is paid out in wages before they pay anything else. For them to make a profit what will yours or the governments cost be?
There are only 28 million people enrolled in all of the Medicare Advantage programs combined, which is about 45 percent of the total number of people on Medicare (traditional plus advantage). So, there are less than 70 million people enrolled in the entire Medicare system. The 70 million number must include a lot of people who are not on Medicare. I don't know how many Federal Government employees work on Medicare, but, when you include their salary, current benefits, and lifetime pension after retirement, they cost taxpayers a whole lot more than $50,000 each. It is probably closer to $150K each.

[MidWestIA]

Only if there are not many massive med bills -

The government pays Medicare Advantage plans a set rate per person, per year (around $12,000 in 2019, not including Part D–related expenses) under what is called a “risk-based” contract. That means that each plan agrees to assume the full risk of providing all care for that inclusive amount.

[craigrmorrison]

There is a recent article published in Forbes Magazine (June 15, 2022) on Medicare Advantage Plans. It says Medicare Advantage patients cost on average 4% more per year than what an average patient costs on traditional Medicare. The article has a lot of other interesting information as well. I am no expert and and I was only posting this because I was so surprised when talking to my friend that these Advantage plans weren’t saving money over traditional Medicare.
Thank you for your input.

Are you taking into consideration the costs of benefits included in a Medicare Advantage plan and NOT with traditional Medicare or a Medigap (aka Supplement)?

For example Prescription Drugs (Part D); preventative dental, vision and hearing; over the counter allowances; fitness memberships and personal emergency response systems are included (albeit co-pays or co-insurance may apply).

Counting all the cost/benefits would be a fair comparison.

[Quixote]

Mine does not if you refer to the monthly premium. It could if you include deductibles and co pays and are a heavy user of the plan.

What would be the point of NOT including ALL expenses when considering this versus that program? I don't have the education, skills, and competencies to evaluate this issue on a macro level; all I can consider are the costs to my family and myself. One of the primary factors in my son and daughter-in-law choosing to leave the country three years ago (taking with them their particular skills and competencies) was the realization that it would cost them nearly $25,000/year in premiums and deductibles for catastrophic coverage before they would actually receive a dollar in coverage. To them—and to us even though we miss them—a no-brainer.


.... I am not a user of Medicare Advantage. I have original Medicare and a Supplement program which also now pays for Gym membership. Supplement payment is now about $160/Month. Gym membership was $55/Month and now is free, covered by the Supplement which is still $160 / Month. Hmm! Wonder where that extra $55 came from. Maybe the theory is that I am healthier and require less medical care

This is exactly our situation—and it works well for us. Our Supplement premium is a little higher; we are in a plan that offered extensive benefits (e.g., overseas coverage) that has been eliminated but into which we are grandfathered, the large portion of which is covered by a previous employer who managed to eliminate some benefits. Fortunately they cannot touch this benefit or our dental and vision benefits, as these were union negotiated.

You do not pay more, the government pays more to the program with the intent of cutting your costs by managing your care and not permitting you choice in your care. The program takes the money that should go to people who are signed up for the care. It is the first step in privatization and should never be chosen as your plan. They get the people with gimmicks that are not health related.

IMHO, a good way to describe the enticements is "gimmicks." Then there are those folks who are healthy who need medical services so infrequently and thus feel that an Advantage plan is more than adequate. Denial is a useful defense mechanism, but there are no promises that we will die healthy (other than possibly in an accident), and inevitably most of us are ill with something from which we inevitably die—not anything that anyone enjoys considering—but there it is....

[craigrmorrison]

I’ll admit I haven’t read the entire thread, but it seems like a bit of a no-brainer…

Advantage plans provide coverage above regular Medicare. They are going to cost more.
Yes, please remember their is always a cost of goods sold and a selling price in business.

Members of a Medicare Advantage plans, with a zero premium, are on a pay-as-you-go basis. Usually no deductibles with co-pays or co-insurance due per visit/treatment. There is also a maximum out of pocket cost that acts as a safety net (not to exceed) for those accumulating large cumulative medical costs.

[nn0wheremann]

I don't know where to start. Have you considered the Federal salaries and benefits to process all of the Medicare Part B claims? And, have you considered that the Medicare Advantage plans are managed by private companies who have a profit a motive to reduce fraudulent claims? What incentive do Federal employees have to deny fraudulent claims? And, have you considered the fact that a patient, who has Medicare Part B and a Medicare supplement has no copay and, therefore, has no incentive to shop for the lowest cost option, and no incentive to reduce treatments or expensive medical supplies or devices. Medicare Advantage plans have all of these incentives to moderate the cost of medical care.
All Medicare claim processing is done by private sector contractors. Some Federal workers do audits and policy work, and initial application to determine entitlement.

[retiredguy123]

All Medicare claim processing is done by private sector contractors. Some Federal workers do audits and policy work, and initial application to determine entitlement.
The claim processing may be done by private companies, but, they don't have the same profit motive to reduce fraudulent claims like the companies who operate the advantage plans on a per capita basis. And, they have no incentive to reduce the number of claims submitted by Medicare providers. Also, if a patient has a zero copay, they have no incentive to seek out cost effective treatments.

[Joeint]

???? You have no idea how Medicare Advantage works.

1. They are paid a monthly per Capita amount not per service billed.
2. The plans do not maintain medical records. The contracted providers do.
3. If the plans are paid a fixed amount (based on age and sex of the beneficiary) they have no incentive to "provide unnecessary services" or medications.
4. Plans are typically paid 95% or less of average cost per beneficiary in the county of residence.

There is so much over utilization in healthcare that they can provide free extra benefits by managing utilization and quality.

Maybe I don't have any idea how Advantage plans work. I did a search on Medicare Advantage fraud it directed me to the CMS.gov website, it shows that each point I made is given as an example of fraud.

[mtdjed]

Only if there are not many massive med bills -

The government pays Medicare Advantage plans a set rate per person, per year (around $12,000 in 2019, not including Part D–related expenses) under what is called a “risk-based” contract. That means that each plan agrees to assume the full risk of providing all care for that inclusive amount.

Why Medicare Advantage costs taxpayers billions more than it should – Center for Public Integrity (https://publicintegrity.org/health/why-medicare-advantage-costs-taxpayers-billions-more-than-it-should/)

There seems to be a further factor included into the meaning of "risk based" contract and the set rate per person? Refer you to the article above which adds a further definition of "Risk Based" and how the government pays the set rate. While the contracted MA Plan assumes full risk of providing all care for those persons insured, there appears to be a "Risk Factor" negotiated by the contractor and CMS regarding the severity of needs of the pool of covered personnel.

Excerpt from cited article.

"Risk score:
Since 2004, CMS has paid Medicare Advantage plans based on a risk score that is supposed to assess the overall health of each patient. Medicare pays higher rates for sicker patients that are likely to require more costly medical services and less for healthy people."

This Risk Factor negotiation has been a topic cited as a source of potential abuse of the MA plans.

[TedfromGA]

When you think about gov't and related costs for any gov't program you just have to wonder....

I've been to the CMS headquarters (7500 Security Boulevard, Baltimore, MD 21244). It is massive - 3 huge multi floor buildings full of people. You have got to wonder what they all do!

If you could gather all the real estate and people asssociated with administrating CMS it would be mind blowing - you might conclude their must be a better way....

[MSGirl]

I was taking with a friend today and I had mentioned that Advantage plans cost the Medicare program more per patient than regular Medicare. He was very surprised to hear that since Advantage plans were originally developed to save money as regular Medicare costs were at that time increasing at a rapid rate. These Advantage plans were supposed to save the Medicare fund money by having drug choice restrictions, physician choice restrictions, specialist access restrictions, etc. Unfortunately, due to bonus payments and other unseen costs the average Advantage patient costs Medicare $321 more than a regular Medicare part B patient!
Where can we find this information?

[MSGirl]

I thank you for bringing this topic to attention. I did a Google search and found an interesting article which describes the process. As any article could be subject to being biased and incorrect, one must be suspect to the article and to interpretation. The article is on this link.

Why Medicare Advantage costs taxpayers billions more than it should – Center for Public Integrity (https://publicintegrity.org/health/why-medicare-advantage-costs-taxpayers-billions-more-than-it-should/)

So, my simplistic interpretation is "Fraud", not by users or providers, but rather by the Medicare Advantage Programs providing the networks. Apparently, the initial program was meant to eliminate fraud by individual claims and this program was conjured up to eliminate that. Seems that the original program was a one cost covers all and some Advantage programs cherrypicked participants to sign up only the healthiest to minimize costs. The program was then changed to add a risk factor for severity of participants needs. Supposedly, that has been abused by some Advantage programs by getting higher funding for participants with higher risks.

Seems that the other benefits offered such as freebies are not the driver since they are not covered by Medicare.

Again, this is my interpretation of the article (which may or may not be true). I would expect the normal on line experts will be around to correct my interpretation and the source that I found.

I am not a user of Medicare Advantage. I have original Medicare and a Supplement program which also now pays for Gym membership. Supplement payment is now about $160/Month. Gym membership was $55/Month and now is free, covered by the Supplement which is still $160 / Month. Hmm! Wonder where that extra $55 came from. Maybe the theory is that I am heathier and require less medical care
Which Supplemental plan do you have? My mother had Plan F, which cost her close to $300 per month. Do you also have Part D ( the drug plan) ? What do you pay for that? Do you have a supplemental dental and optical plan as well?

[Happydaz]

Where can we find this information?

See post #31. The topic is the comparison of the actual total cost of Advantage Plans compared to traditional Medicare to the Medicare program, not the nominal cost an individual has to pay out of pocket for co pays and premiums, etc..

[retiredguy123]

When you think about gov't and related costs for any gov't program you just have to wonder....

I've been to the CMS headquarters (7500 Security Boulevard, Baltimore, MD 21244). It is massive - 3 huge multi floor buildings full of people. You have got to wonder what they all do!

If you could gather all the real estate and people asssociated with administrating CMS it would be mind blowing - you might conclude their must be a better way....
LOL. No need to wonder. They are wasting your money. I have been there also, and the parking lot is so huge, that you may need to call a taxi to get from your car to the building. I once had a Government benefits approval expert tell me that they actually trained their employees with the motto "When in doubt, shell it out".

[justjim]

Ask Mr. Google salary of CEO of United Health Care - 12.8 million. UHC profits were 17.3 billion. These insurance companies make money on Medicare or they wouldn’t be in the business. Capitalism at its best.

[Quixote]

Which Supplemental plan do you have? My mother had Plan F, which cost her close to $300 per month. Do you also have Part D ( the drug plan) ? What do you pay for that? Do you have a supplemental dental and optical plan as well?

There is a crucially important point here which some (many?) of us are not aware of. I wasn't until our former employer chose to go out of the 'health care for retirees' business.

(Aside: Can an employer really do that? Evidently, because our employer did. We were left with a buyout plus dental and vision benefits. And why? Because these were union negotiated benefits! Think about that....)

Suddenly the choice of Medicare Supplement plan or Advantage plan was dropped in our laps. That was when we discovered—and this is the part that's crucially important—that insurance companies can charge whatever they wish for coverage in, as in the quote above, Plan F, but the reality is that Plan F is Plan F!

The benefits of the different Supplement plans are negotiated between the insurance compnuhj Medicare, and the benefits of every Plan F are identical to the benefits of every other Plan F! (Same, of course, for all the other Medicare Supplement plans. When we retirees had to take over, we found that our employer had us all in a Mutual of Omaha Medicare Supplement plan, which cost almost exactly $100 more per month than the Supplement plan identical in every way sponsored by United HealthCare!

[kathyspear]

Which Supplemental plan do you have? My mother had Plan F, which cost her close to $300 per month. Do you also have Part D ( the drug plan) ? What do you pay for that? Do you have a supplemental dental and optical plan as well?

One factor in setting the premium is the age at which the plan was initiated. I (stupidly) stayed on hubby's work insurance until I was 68 or 69. I pay about $200 per month for Florida Blue plan G. It would be less if I had signed up at 65.

FWIW, switching to traditional Medicare and FL Blue was a great move for me. I have had significant medical bills this year and have paid nothing out of pocket other than my plan G deductible which is about $200 per year.

k.

[Hardlyworking]

One factor in setting the premium is the age at which the plan was initiated. I (stupidly) stayed on hubby's work insurance until I was 68 or 69. I pay about $200 per month for Florida Blue plan G. It would be less if I had signed up at 65.

FWIW, switching to traditional Medicare and FL Blue was a great move for me. I have had significant medical bills this year and have paid nothing out of pocket other than my plan G deductible which is about $200 per year.

k.

So, $2600 then. Not bad. Did you have any issues getting through underwriting?

[kathyspear]

So, $2600 then. Not bad. Did you have any issues getting through underwriting?

Not that I recall. I signed up for FL Blue when I signed up for Medicare Part B. I did it online and I don’t recall what all they asked me. Maybe underwriting doesn’t apply if you sign up for both at the same time even if you are older than 65. I don’t know.

k.

[Hardlyworking]

Not that I recall. I signed up for FL Blue when I signed up for Medicare Part B. I did it online and I don’t recall what all they asked me. Maybe underwriting doesn’t apply if you sign up for both at the same time even if you are older than 65. I don’t know.

k.

If you signed up before 65 1/2 you were in a guaranteed issue time period.

[M2inOR]

We were in an HMO for most of our working years, Kaiser Permanente. Thru our employers, Kaiser provided our healthcare and prescriptions, for a monthly fee, and co-pays when there were office visits, procedures, or hospitalization.

We were very happy. Thankful for our good health.

When we retired and moved to The Villages, we looked at traditional Medicare with Supplemental, as well as Medicare Advantage plans, choosing the latter, as Villages Health seemed quite like what are Jasper experience has been. No need to search for doctors when something required attention. Our PCP took care of things or referred us to a specialist if needed.

While premiums and co-pays are quite low, they monthly total cost is determined by income. The amount paid to CMS can get larger due to IRMAA. Your monthly Part B payment to CMS is based on your 1040 income.

For regular healthcare, you must use services provided in your service area.

Emergency or Urgent Care is covered across the US. Foreign coverage is not included, so consider paying out of pocket, or separate travel insurance.

We are happy so far with Villages Health and United Healthcare.

And yes, UHC/Villages Health DOES get a fixed amount from CMS regardless of how much healthcare we get each year. They are also reimbursed for certain things over and above that annual payment. They are also rewarded with incentives for keeping patients healthy.

[kathyspear]

If you signed up before 65 1/2 you were in a guaranteed issue time period.

I was 69 when I switched from private insurance to Part B and FL Blue. Treated for cancer ten years earlier. They accepted me. [shrug]

k.

[Hardlyworking]

I was 69 when I switched from private insurance to Part B and FL Blue. Treated for cancer ten years earlier. They accepted me. [shrug]

k.

Glad you were able to get in. They rejected me for taking metformin and blood pressure meds.