Medicare beneficiaries are about to get bombarded by confusing TV commercials that will run heavily from now until December. If you do what the ads say, you might regret it later.
The TV commercials will be aimed directly at everyone who has Medicare. You’ll see full-page newspaper and online ads and extra-long commercials on cable TV channels and radio stations.
So what’s behind this Medicare advertisement blitz? It’s designed to get you to change who provides your Medicare coverage.
Here’s what you need to be aware of as you listen to those endless Medicare plan pitches during open enrollment season. (Last updated Sept. 12, 2023)
It’s Medicare’s Annual Open Enrollment Season
“Get more of everything you need for the price you deserve.” That was in a big advertisement that appeared in my local newspaper a few days ago. The ad’s headline was “A new way to get more from Medicare for less.”
How many of us on Medicare could resist reading that ad? Brace yourself: If you or a family member are on Medicare, you can expect to be the target of that and similar pitches for the next two months.
Here’s what’s going on.
Medicare has an annual open enrollment period from Oct. 15 to Dec. 7, 2023. During that time, beneficiaries can elect to make changes to their coverage which then become effective on Jan 1, 2024.
Prior to the start of the open enrollment period, Medicare prescription drug and Medicare Advantage plans are required to send their enrollees the Annual Notice of Change (ANOC). Its purpose is to inform you of changes in costs or benefits that could affect your decision to continue with them or to switch to a competitor.
Even if you’re happy with your current plan, it’s important to review the ANOC to see if premiums, deductibles, or co-pays have increased.
- Are all of your prescription medications still on your drug plan’s formulary?
- Has your Medicare Advantage plan reduced benefits or made changes to its network?
This period is your opportunity to make sure you have the best coverage for your particular situation.
Hard Sell Medicare TV Commercials
The problem is with the nature of the advertising onslaught. Many of the ads are hard sell, placed primarily by insurance brokers representing specific plans that want to boost their enrollment numbers.
But many of the ads make promises that are easy to misinterpret.
The Medicare TV commercials will be all over the cable channels that draw an older audience. These advertisement are almost impossible to miss if you watch a cable news channel. The commercials (many of them two minutes long) likely feature an aged celebrity or former athlete telling you that you can get extra benefits not covered by Medicare and will often include the phrase “get all the benefits you deserve.” The ads urge you to call a toll-free number right now to get those extra benefits.
What the spokesperson or announcer won’t tell you is the contents of the fine print at the end of the ad. That fine print will disclose that the extra benefits are limited, may have restrictions, and are not necessarily available to everyone and may not be available where you live.
The fine print also says that by calling that toll-free number you are calling an insurance broker and giving permission for an agent to call you. In most cases, that number does not connect you to the actual plan.
It’s not just the TV advertising. Last week I listened to a presentation from a Medicare Advantage plan representative who touted a new extra benefit offered by her plan. She told the audience that the plan will limit the cost for a 30-day supply of insulin to $35 per month. What she didn’t say is virtually every plan will provide that identical benefit because of a recent change in the law. Here is what the Medicare website says about insulin coverage:
Starting in 2023, the cost of a one-month supply of each Part D-covered insulin will be capped at $35, and you won’t have to pay a deductible for insulin. This applies to everyone who takes insulin, even if you get Extra Help.
That’s good news for diabetics, but you don’t need to change plans to get this benefit.
Understand how Medicare Advantage plans work
Here’s what most people don’t understand. Medicare Advantage plans (also known as Medicare Part C) are sold by private insurance companies with a Medicare contract. They depend on signing up large numbers of enrollees to be profitable.
Most of these providers are Health Maintenance Organizations (HMOs). Their model typically has a defined network of providers that members must use for treatment to be covered. Some of those plans have limited networks that can restrict your choice of doctors. If you want to see a specialist, you will first have to go through your primary care doctor to get prior authorization (which can be denied) before you get a referral. You may face challenges getting prior authorization for care you may want or feel you need.
If you want to see a specialist who is not part of the plan’s network, then you will most likely have to pay out of your own pocket because the plan won’t cover it. I’ve counseled Medicare Advantage plan members who wanted to see out of network cancer and heart specialists and had to deal with that situation.
The alternative, “Original Medicare,” is a fee-for-service model where providers get paid only when they see a patient. There are no network restrictions, so beneficiaries can see any doctor or specialist anywhere in the U.S. who accepts Medicare (and most do).
Financially, Medicare Advantage plans work under a capitated (from the Latin phrase “per capita”) payment model. That means the plans receive a fixed monthly payment per person from Medicare to provide all Medicare-covered services for each enrollee. However, that amount does not change whether they see the patient only once a year or once a week. The only other money the plan receives comes from enrollee premiums and co-pays. So the plans have a financial incentive to enroll as many people as possible while managing care to contain costs.
Medicare Advantage Plans Have Problems
According to a recent report by the U.S. Department of Health and Human Services Office of the Inspector General (OIG), Medicare Advantage plans have “widespread and persistent problems related to inappropriate denials of services and payment.” The report begins with this headline:
Here’s what that report said in its opening paragraph (the report uses the term MAO to mean a company that operates one or more Medicare Advantage contracts):
Our case file reviews determined that MAOs sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules. MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules. Denying requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers.
Quoting further from that report:
Although MAOs approve the vast majority of prior authorization requests and provider payment requests, MAOs also deny millions of requests each year. A central concern about capitated payment models—including the model used in Medicare Advantage—is the potential incentive for insurers to deny access to services and payment in an attempt to increase profits. The Centers for Medicare and Medicaid Services’ (CMS’s) annual audits of MAOs have highlighted widespread and persistent problems related to inappropriate denials of services and payment.
The point of this article is not to attack Medicare Advantage plans, but rather to help you understand what’s behind all those Medicare TV Commercials and print ads that will be aimed at you.
Is Medicare Advantage really an advantage?
“Medicare Advantage” is a marketing name. Whether it’s an actual advantage depends on the individual. One real advantage for many is simplified enrollment. It’s one-stop shopping as most of the plans include prescription drug coverage. So there’s no need to find and sign up for a separate drug plan. There is also no need to find and pay for a Medicare Supplement plan as they are not allowed as part of Medicare Advantage.
Additionally, some plans offer zero monthly premiums and a zero deductible. (That doesn’t mean they are “free.” You’ll still have co-pays that can mount up). Others offer limited, free transportation to medical appointments and an allowance for over-the-counter medications. I’ve counseled low-income seniors for whom those things are very important and helped them find plans that worked for them.
What those Medicare TV commercials don’t tell you
Some of the plans offer limited coverage for eyeglasses, routine dental care, hearing aids and gym memberships that Medicare doesn’t otherwise cover. But those extra benefits often come with trade-offs because the plans get to make their own rules.
For example, they can require that you only use dentists in their network in addition to having a dollar limit for dental care. The plans decide how generous or limited those extras are and who gets them. They can also require (and withhold) prior authorization to access those benefits.
Switching plans to get those extra benefits might mean having to change doctors. Some of the zero-premium plans might mean you have to deal with a more limited network of providers, drive further for labs or X-rays, or have to wait longer for certain kinds of appointments. Access to those extra benefits may have restrictions and conditions attached.
Don’t change your Medicare plan based on TV commercials
The advertising may make it seem easy to get the extra benefits. But you should not change plans just to pick up those extras. It’s important that you do your homework to make a smart decision about your Medicare plan.
Before you sign up to change plans, ask these questions:
- Does your current doctor contract with that specific plan? Contact your doctor’s office and ask. If they don’t, you will have to find a new primary care doctor. Are you OK with that?
- Ask your dentist’s office if they are part of that plan’s network. If not, you will have to find a new dentist. Get the list of dentists in that network to see their names and locations.
- Do you know where you would have to go for labs, X-rays, urgent care, ER or hospitals? Contact the plan directly and ask.
- What are the specific limits and conditions attached to each extra benefit? Do you qualify and what would you need to do to access them? How often can you access them? Contact the plan directly and ask.
- What is the new plan’s Medicare Star Rating? Ask the plan. I would be wary of switching to a plan that is unrated or has fewer than three stars.
- Then ask yourself how important those extra benefits really are to you.
Sometimes financial pressures cause people to change from Original Medicare to a Medicare Advantage plan to save money. And there are many good reasons for wanting to change Medicare Advantage plans. ( See: Why would Medicare Advantage cancel a patient’s surgery at the last minute?)
Some of these reasons include increases in premiums, co-pays, or deductibles. Some plans quietly take away a coverage benefit. And provider networks change. As I mentioned earlier, you can find those changes in the ANOC the plans are required to send out.
Use the Medicare.gov website to explore plans
Before you change, you can get an overview of the plans available where you live by using the Medicare website’s plan finder. It will show the plans, premiums, deductibles and co-pays. It will also indicate whether there are limits or conditions attached to various services and benefits.
Talk to a SHIP program Medicare counselor
An excellent source of help in navigating Medicare’s complexities is the local office of the State Health Insurance Assistance Program (SHIP). It’s a free, federally-funded program to provide factual and unbiased Medicare information. You can find the nearest local SHIP office on their website.
The TV commercials and other advertising may make it seem easy to get the extra Medicare benefits. But your decision could affect your access to healthcare. Call and talk to a SHIP counselor before you change your coverage.
Don’t forget: The main reason for health insurance is access to quality health care when you need it. That’s what should drive your decision. (Abe Wischnia for Consumer Rescue)