Read the fine print when deciding between Medicare and Medicare Advantage plans

Medicare Advantage, a managed care approach to Medicare, has become the healthcare program of choice for seniors in Florida.

More than 50 percent of Medicare beneficiaries in Florida are enrolled in Medicare Advantage plans, compared with the national average of 42 percent, according to an analysis by the Kaiser Family Foundation (KFF), a nonprofit health policy think tank.

These are the plans you see heavily advertised during Medicare’s Open Enrollment period, which runs from Oct. 15 to Dec. 7. The plans take effect Jan. 1.

Miami-Dade has high Medicare Advantage enrollments

“In Florida, 51% of all Medicare beneficiaries in the state are enrolled in Medicare Advantage, and the share by county ranges from 16% in Monroe County (Key West) to 73% in Miami-Dade County,” the Kaiser study noted.

Florida has one of the highest percentages of Medicare Advantage beneficiaries in the country, along with Minnesota (50 percent). In fact, the two states account for at least 50 percent of the Medicare beneficiaries enrolled in Medicare Advantage plans, along with Puerto Rico, according to the study.

The number of people enrolled in Medicare Advantage plans has more than tripled since 2000, from 7 million to 26 million in 2021, the study found.

The appeal of Medicare Advantage programs, which are administered by private health insurers, has largely to do with costs and access to additional services such as eye exams and glasses, hearing exams and hearing aids, dental care and fitness programs like Silver Sneakers. (Original Medicare does not offer these services.)

Costs are important because many seniors can’t afford to pay significant out-of-pocket costs. Half of all Medicare beneficiaries lived on annual incomes below $29,650 per per person in 2019, according to another study by the Kaiser Family Foundation — and that was before the economic ravages of the pandemic.

MA plans have limited access to doctors, prior authorizations

But there are some key differences in the Medicare Advantage plans over Original Medicare, primarily related to access to doctors, hospitals, nursing homes, rehab facilities and specialists.

Most Medicare Advantage plans are set up as Health Maintenance Organizations (HMOS), which means you have to go to the doctors, hospitals, nursing homes and rehab centers in their networks. Those networks usually are limited to doctors in your home county. That can be an issue if you get sick and/or hospitalized elsewhere and the Medicare Advantage plan won’t cover it, leaving you with large out-of-pocket hospital bills.

By contrast, under Original Medicare, you can go to any doctor or hospital in the country that takes Medicare. The vast majority of doctors and hospitals take Medicare.

Some Medicare Advantage plans are PPOs, where you can see physicians outside the plan’s network, but those plans are more costly.

Additionally, Medicare Advantage plans usually require a referral to see a specialist, whereas Original Medicare does not. And many of the plan’s services require prior authorization.

“Prior authorization is most often required for relatively expensive services, such as inpatient hospital stays, Part B drugs, and skilled nursing facility stays, and is rarely required for preventive services,” the Kaiser Family Foundation study cited. “[It] is also required for the majority of enrollees for some extra benefits… including comprehensive dental services, hearing and eye exams, and transportation.”

Hospital costs can differ between Medicare, MA plans

Another thing to watch for with Medicare Advantage plans: Some of the MA plans have a co-payment when you are in the hospital, which can add up quickly if you are there for an extended period. In fact, in some instances, you can pay more for hospitalization under Medicare Advantage than you would with Medicare.

With Original Medicare, the first 60 days of your hospitalization are covered entirely, $0 co-pay. Days 61-90 have a $371 per day co-pay. Days 91 and beyond have a $742 co-pay, with caveats for “lifetime reserve days.”

With some Medicare Advantage plans, a co-pay will kick in immediately while you’re in the hospital.

“Something that surprises people is that some of the Advantage plans have a co-payment when you’re in the hospital — and if you’re on your fifth day and it’s costing you more than $100/day, that can add up,” Kathleen Sarmiento, the SHINE Liason at the Alliance for Aging, Miami-Dade County’s elder affairs agency, told the Herald last year.

The two biggest Medicare Advantage plans are UnitedHealthcare and Humana, which accounted for 45 percent of all Medicare Advantage enrollees nationwide in 2021, according to the Kaiser Family Foundation study.

Blue Cross Blue Shield accounted for 14 percent. Four other insurers — CVS Health, Kaiser Permanente, Centene and Cigna — made up 24 percent of enrollment in 2021. All other insurers accounted for 17 percent.

Does Medicare have enough money?

Medicare is funded through two trust fund accounts held by the U.S. Treasury, the Hospital Insurance Trust Fund and the Supplementary Medical Insurance Trust Fund.

The Hospital Trust Fund is funded primarily through payroll taxes, income taxes paid on Social Security benefits and Part A premiums, along with interest earned on the investments of the Fund. The Hospital Trust Fund supports Medicare, Part A, which includes hospital stays, nursing home care, home healthcare and hospice.

The Supplementary Medical Insurance Trust Fund, which funds Medicare Part B (medical insurance), Medicare Part D (prescription drugs) and a share of Part C, is funded through general tax revenue and premiums paid by enrollees.

The Hospital Insurance Trust Fund is projected to be depleted by 2026, according to the 2021 annual report of the board of trustees of the two trust funds. And, the report said, the Fund’s income is projected to be lower than last year’s estimates due to lower payroll taxes during the pandemic.

The Supplementary Fund is expected to be “adequately financed” over the next 10 years, the trustees’ report said, because income and revenues for Parts B and D are reset every year.

While Medicare experts don’t expect the Trust Fund to become insolvent, it may require changes in how payments to Medicare Advantage plans are calculated by Medicare.

In 2020, Medicare Advantage plans had an unexpected windfall in profits due to fewer people going to doctors and hospitals during the pandemic, while the plans received preset amounts from Medicare for each member, according to the Urban Institute.

In addition to Medicare recalculating Medicare Advantage payments, Congress most likely will step in to shore up funding, as it has done in the past.

After all, there are nearly 63 million people enrolled in Medicare in the United States, a number that is expected to grow as baby boomers continue to hit retirement age. That’s a large bloc of voters, or potential voters.

This story was originally published September 29, 2021 at 3:07 PM.