Jason and Brian discuss Medicare Advantage vs. traditional Medicare and some changes recently introduced to Medicare Advantage plans.
Brian O’Connell is an insurance analyst at insuranceQuotes.com. He is a Pennsylvania-based writer with 17 years experience covering business news and trends, particularly in the financial, health and sciences, Internet and technology, political and career management sectors. O’Connell is a former Wall Street bond trader; and is a best-selling author who’s placed two investment books in “The Book of the Month Club”. Brian is also a high-profile business writer whose byline has appeared in dozens of top-tier national business publications, including CBS News, Time, MSN Money, The Wall Street Journal, CNBC, The Street.com, Yahoo Finance, CBS Marketwatch, and many more.
To learn more visit: https://www.insurancequotes.com/
Below is the full transcript:
Announcer: Welcome back, America, to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. And now, here is your host, Jason Parker.
Jason: America, welcome back to another round of Sound Retirement Radio. So glad to have you tuning in this morning. We have a great guest lined up for you to talk about Medicare, and this is important because one of the number one concerns people have as they’re getting ready to retire, transitioning through retirement, is understanding what health insurance is, and how much it’s going to cost them. Medicare’s a wonderful benefit, and we just want to help you understand how it works. So we’ll get to our guest in just a minute, but as you know, I like to get the morning started right two ways. The first is by renewing our mind, and I have a verse here from Galatians 5:22. “But the fruit of the Spirit is love, joy, peace, forbearance, kindness, goodness, faithfulness.” That’s awesome.
Jason: And then I’ve got a joke here for you. What is the Tooth Fairy’s favorite dance? The floss. If you don’t know what the floss is, come on by the office, I’ll show you. The kids love the floss. Darn video games influence their little minds, but, okay. So today we are going to be talking about Medicare. This is episode 199. It is my good fortune to bring Brian O’Connell onto the program. He is an insurance analyst at insurancequotes.com. He’s a Pennsylvania-based writer with 17 years experience covering business news and trends, particularly in financial health and sciences, internet and technology, political and career management sectors. O’Connell is a former Wall Street bond trader and is a best-selling author. Brian is also a high-profile business writer whose byline has appeared in dozens of top-tier national business publications including CBS News, Time, MSN Money, The Wall Street Journal, CNBC, thestreet.com, Yahoo Finance, CBS MarketWatch, and many more. Brian O’Connell, welcome to Sound Retirement Radio.
Brian: Thank you, Jason. Thank you for having me, and I did like the Tooth Fairy joke. I didn’t hear that one before, but that was great. Thank you for that, too.
Jason: Can you do the floss, Brian?
Brian: My kid probably could, but no. I probably wouldn’t, that would be a visual, a Kodak moment nobody’d want to see, I don’t think.
Jason: I find the older I get, the stiffer I become. I’ve never been much of a dancer.
Brian: Yeah, yeah. I’m with you, yeah.
Jason: My hips are kind of locked up, man.
Brian: I hear you.
Jason: All right. So Brian, it’s good to have you on the program to talk about this new Medicare Advantage rule, and as I understand it, we have a limited period of time to do something. So I was hoping we could start our conversation today with just a quick overview of the difference between traditional Medicare and the newer Medicare Advantage plans that are out there. And if you could just give our listeners a quick primer.
Brian: Yeah, there are variances but I think there are more similarities than differences. Basically, Medicare Advantage is a type of Medicare health plan offered by private companies and not by Uncle Sam. That’s one big difference. And these private companies contract with Medicare to provide, basically, all the elements you get in your Medicare Part A and Part B benefits plans, which are the basic Medicare plans. They’re run through different organizations, like health maintenance organizations offer Medicare Advantage. PPOs, preferred provider organizations, they also offer Medicare Advantage plans. Private fee-for-service plans are available if you have special needs, they are available to Medicare Advantage.
Brian: Basically, the primary difference, Jason, is that they’re run through private companies, charged through private companies, but that’s transparent to consumers, to mainstream Americans. They don’t really care who charges, just hopefully getting the benefits. But the way it’s structured in government and private sector, there is a difference between Medicare and Medicare Advantage plans.
Jason: Okay. Now I-
Brian: And also if you’re enrolled in Medicare, if you’re enrolled in a Medicare Advantage plan, most Medicare services are covered through the plan.
Jason: Okay, okay. So when those Medicare Advantage plans first came out, I feel it was about 10 years ago, now. Was it that long ago, or do you know?
Brian: That’s probably about it, yeah. It’s mainly in the ballpark, yeah.
Jason: Okay. And I remember at first they came out, they were really attractively priced. It seemed like a lot of people were opting out of traditional Medicare Part A and Part B and opting into the new Medicare Advantage plans. And then it seemed like some of those Medicare Advantage plans, the prices started to go way up, and there was limited availability, depending on the county that you’re in. So then it seemed like there was this trend back to traditional Medicare. Are we seeing more people opting towards Medicare Advantage again? Is that a trend that’s happening, or do you know?
Brian: I think, yeah. We’ve looked at it. Usage has plateaued. If you look at Medicare and Medicare Advantage as an arc, like the Arc of St. Louis, you’re right. It started out very agreeable pricing structure, and then started creeping up every year. And the last two or three years you got to the top of the arc and the prices were higher, services were fewer and lower, and I think the government realized that, which is why they’ve been in this … frenzy’s too harsh a word, but they’re actively engaged in the last nine months, 12 months to shift the Medicare Advantage structure around. So I think you’re already seeing at the end of last year more services, moderately lower prices, and then the kicker when they came in in January, we’re talking about today is the new do-over plan. If you don’t like your plan, you can change it.
Brian: So they’re making systematic changes that I think, indeed, they should have been made a long time ago. But they’re doing it now, and they’re making a good faith effort to give consumers a good experience with Medicare Advantage, something that wasn’t always the case, as you said, especially in the last couple years when prices started going up and services started going down.
Jason: Yeah. So tell us this new rule, this new do-over rule. What’s it entail, what’s the deadline, and how did it come to be in the first place? Why are we having this do-over?
Brian: Well, consumers were complaining. Advocates were complaining. There was so much confusion, and we can get into that on the day-to-day experience of using the plan, that the stiff enrollment period that ended when it ended, right, 12/31/18, that wasn’t going to work anymore because people are coming back and complaining to their doctors, to their healthcare practitioners, again to advocates, and to the media. And were saying, “I went to get my prescription filled and it wasn’t covered. I thought it was”, or, “My doctor isn’t covering me for this or that.” So there was an impetus that the Medicare in the administrative level to say, “Okay, let’s give Medicare Advantage users a do-over, a 90 day do-over that after initially enrolling in a plan, and they start using the plan, and they don’t like the plan or they have qualms or things there they thought were covered, aren’t covered, they could have a way out.
Brian: So what they did was decide that beginning this year, from January 1st to March 31st that people would be able to switch out of their Medicare Advantage plans, the existing ones, the ones they originally signed up for. They’re calling that, but that’s the term they’re using, it’s a do-over period. If you don’t like your Medicare Advantage plan, you can do it over again and get a new plan. Basically, that’s the premise and the genesis.
Jason: And what’s the deadline?
Brian: It became quite apparent that Medicare. March 31, 2019 going forwards. As we know now, and this could change, it’s going to be March 31st of every year. Every year after the initial enrollment period ends, which is December 31st, Medicare Advantage consumers can have 90 days, three months to use the plan, kick the tires, see what they think about it, and if they like it, keep it, if they don’t like it, well, they can get the new plan, a new Medicare Advantage plan. It’s worth noting they can’t switch over to Medicare, they can just get another plan inside Medicare Advantage.
Jason: Well, that was going to be my question. Can you, if you don’t like Medicare Advantage, you say, “Oh, Jeez, I’d rather go back to traditional Medicare”, it’s not an opportunity to do that, it’s just to switch to a different Medicare Advantage plan, a different private carrier, if you will.
Brian: Well, it’s limited. They can go to Medicare Part A or B, okay. They can do that. And there’s no saying that they won’t expand that in 2020. Nobody knows that yet. They haven’t said. But by and large, consumers can either choose a new Medicare Advantage plan or switch back to a traditional Medicare Part A or Part B plan, but no more. That’s the extent of it.
Brian: That’s the case even as they … okay. Go ahead, I’m sorry.
Jason: Well, I was going to say I like the fact, I like that they’re giving people the opportunity. Because sometimes these insurance come out with these, these companies come out with these brochures. It’s all sizzle and no steak, and then you go to use the thing and you’re like, “Wait a second, this isn’t working”, or the customer service stinks, or whatever it is. So I like the fact that they’re empowering consumers to say, “Hey, look. If you’re not doing what you said you were going to do, if I don’t like this plan, then it gives me an opportunity to make a switch and I don’t have to wait a whole year before I change it.” I do like that.
Jason: I’m a little bit concerned, though, that once you start making concessions to the way the rules works, so once you start saying, “Okay, now we’re going to give you a 90 day change.” Why not just give people the opportunity to change anytime throughout the year? If a company’s not doing what we expected, if we don’t like the service, why are we locked into an agreement? Why doesn’t the government just come out and say that? I guess you’re not the one to answer the question, but I think once you start down the slippery slope of changing the rules, I think, why not just make them totally loose and say, “Look, if you don’t like something, you can change it.”
Jason: If I go to McDonald’s and I order a Big Mac and I don’t like it, I take it back and I get a cheeseburger.
Brian: That’s a very straightforward process. Now we’re talking about government, and we’re talking about healthcare. It’s complex, in the first place, and nothing ever happens fast. I’m not saying the experts I’ve talked to in covering this topic aren’t saying that couldn’t happen. They’re not saying it’s going to happen, because nobody knows. But right now I think, this is typical of a government plan. They put it out for comments, some experts, educators, advocates, like I said, came back and said, “You know, you should give these people the chance to get out of plans they don’t like or not using correctly, or if they’re confused”, and this is the first bite of the apple, in my opinion, again. I don’t work for Medicare. I don’t know what they’re doing a year from now.
Brian: But actually, a lot of the experts I talk to, I talk to doctors, nurses. I talk to administrators, I talk to financial advisors who advise retirees on healthcare needs, and they say, “You know, we just wanted to see an opportunity where people could change their mind”, and say, as we started the portion of the conversation, if they went to a prescription, if they went to a pharmacy and they couldn’t get their prescription drug covered because they were confused, they thought it was covered and it wasn’t. I mean, you can imagine trying to run a quick errand to fill a major prescription maybe, and finding out you have to try another drug first, request an exemption, even though you’ve been on that medication for years and haven’t switched doctors.
Brian: Now that went away, and you have no recourse? No, that wasn’t going to fly with users, it wasn’t going to fly with the people who advocate for users. So I think there was a bit of a lobbying effort to get the 90 days. I think people are happy with that. Whether they want to go more than that, yeah, I would say that they probably do. But again, it is a massive government healthcare industry complex structure in the first place, and change is glacial, at best.
Jason: So Brian, let me ask you. You’re, it sounds like, a young man. You have a sharp mind. You write on these topics all the time. I’ve got two questions. The first one is, on a scale of 1 to 10 in terms of complexity, one is very easy to understand, 10 is very complex. How would you rate Medicare and Medicare Advantage on a scale of 1 to 10 in terms of complexity? One, not complex.
Brian: If you never used it? Yeah, if you never used it and you’re a Main Street consumer just like me, just like you, it’s 7, 8, 9. Let’s say you’re older, and you don’t have any support, family support, and that’s a tragedy, I believe, but it does exist, it’s a 10. Who’s going to help you explain, well, this is covered, that’s not covered. If you have buyer’s remorse, well, sorry. You can’t change plans. Who’s going to help people make these decisions? They expect Medicare Advantage to work like Medicare. That’s their experience, that’s what they’ve been doing, that’s what they’ve been told, and I think the government recognizes that. They’re trying to make it easier, as I said, trying to offer more services, trying to curb prices, trying to offer new incentives like do-over periods.
Brian: And I think they’re moving in the right direction. But it’s such a complex problem in the first place. That’s a very difficult task to achieve.
Jason: And what really compounds this, because I see it every day. I see people that are 75, 80 years old. They don’t have the same capacity that they did when they were 45. I mean, they’re just, a lot of times they’re just not mentally as sharp as they once were, and some of this stuff gets so overwhelming and so confusing. Like you say, if you don’t have somebody to help navigate this with you, it can really be tough. I know here in the state of Washington we actually have a group called SHIBA, State Health Insurance Benefits Advisor, so there’s an organization that can help retirees navigate some of these complicated decisions regarding health insurance.
Jason: So with Medicare Advantage, how well-publicized was this change that gave people the opportunity to do this do-over?
Brian: That’s a great question, because mostly they went to the media. Obviously, they have their PR and marketing firms, and I think Medicare’s done a, I’ve only been covering them for 18 months, but I’ve been covering healthcare for 15, 16 years. But I’ve seen more outreach from their media people. I’ve seem more white papers, case studies. I’ve seen more interviews with advocacy groups and podcasts, and things like you do, and they’re trying to get the word out there, but definitely in their way. It’s a process. But I think, all along they’ve been saying with this particular mission of extending the do-over period for 90 days is saying, “Hey, if you have a question, if you are that 75 year old you just mentioned, and you’re confused. Maybe you’re not dealing with your doctor or you’re not getting the right information from your healthcare practitioner, call us. Go to our website.
Brian: I mean a consumer Main Street American dealing with Medicare Advantage questions can always pick up the phone and call 1-800-MEDICARE. They can go to the website, the medicare.gov website. I’ve done both in my duties as a reporter. You’ve probably done this stuff. I had to check it out myself, and it’s a pretty good experience. It’s not akin to the motor vehicles, which, on a scale of 1 to 10, that’s very difficult to do sometimes. But it’s, for a government service, I thought the customer service was pretty good the times I’ve used it. So there’s always that option for Americans who are confused with Medicare Advantage, want to change plans, not sure which plans to choose, can always talk to your doctor and always pick up the phone or go on the Medicare website and get help there.
Brian: That’s pretty easy to do, actually. I’m not in the business of crediting or negating anything government does with Medicare, but in this instance you can make a defense they’re trying really hard to get the word out and offer supporting services for people who are confused about what they should do if they want to change a plan, or if they want to keep a plan.
Jason: And so what is the process? If somebody, because like you say, we only have a couple of days now by the time this show goes live on the radio. What’s the process? How are they going to, if they want to switch plans, do they do that online? Do they have to call somebody? How do they do it?
Brian: Both. You can do it both ways. And you should know that going in. You should also know going into that process, the exchange process, if you change a plan, that obviously, not all Medicare Advantage plans work the same way. So before you join, before you switch plans, take the time to find and compare Medicare Advantage plans in your area. Now that is easy for somebody in New York City, it’s very urban and there’s lots of people and lots of options. If you’re in rural areas it’s more difficult, because Medicare Advantage plans are sort of structured that way. They go where the people are, so you have more choices in the big urban areas like Chicago. I’m here in Philly, New York, Seattle, where you are, or if you’re out in Nebraska or Kansas, beautiful places, but may not have as many options, because there’s not that many people.
Brian: In that instance, or both instances actually, but especially if you don’t have a lot of choices, you can use the Medicare Plan Finder. This all stems from using, by the way, www.medicare.gov. That’s your go-to place. I gave you the phone number, I’ll give you that again. I think as a public service people should have it. It is 1-800-MEDICARE, or 1-800-633-4227. But if you’re going to use the internet and you’re going to use the website, that’s a great place to start because it’s all right there in front of you, and they do a pretty good job of making it explainable in plain English. And the Medicare Plan Finder is really easy to use, very user-friendly.
Jason: I agree. Yeah, I’ve been on there. I’ve actually helped people navigate that Plan Finder where we’ll go in, we’ll put in all of their different prescriptions, and we’ll sit there together just to kind of walk through the process. And it is very helpful too, because Medicare will show you, if you use that tool, what’s going to be the best value for you based on the prescriptions you’re taking and your overall well-being. And so I find that to be a really helpful tool, and again, it can be a little overwhelming for people that aren’t used to that type of technology. But I want to back up a little bit, too, because Brian, we do have some people that are 75 years old that are just sharp as a knife. I mean, they are just really, really, with it. But I find other people are 75, 80 years old and things just, the synapses just aren’t firing as fast as they used to.
Brian: Well, they can take it, what they can do, Jason, is take a paper enrollment form. Print it out, have someone print it out, your doctor, your nurse at your doctor’s office be happy to do this for you, give you the paper-based forms if you’re 75 or 80 or 85 and you’re used to doing it that way, they have that option. You can get help from your medical professional or as I said, through Medicare, line by line to fill out the form. You can ask questions about the different plans, as well. I’m on a certain cancer drug, is that covered? Yes or no. You can get pretty easy answers, but it’s got to be up to the end user. It’s going to be up to the Medicare Advantage consumer to actually get out there, do a little bit of research, a little bit of due diligence, and have the questions ready to ask before they make a decision.
Jason: Well, I’ll tell you-
Brian: I’m not saying it’s easy, but it’s not that difficult either, I’ll tell you that.
Jason: And I was sitting with a family member recently who was taking a specific prescription, and we found out that the place that she was going to be getting that prescription from was no longer going to be a preferred provider, which means that she wasn’t going to get the pricing, the better pricing through her plan. But what we found was that she could order those prescriptions online, and by ordering them online she could get a three month supply. And the other thing, as we went through this process together, we found out that there was a generic that was much, much less expensive than the brand name medication that she was taking.
Jason: So while at first it seemed a little unnerving to go through that process and a little upsetting, it actually ended up being better because the prescriptions are delivered to her house, now, and because we found that there was a generic available to her, and she just didn’t know to ask her doctor. She didn’t know to ask, hey, is there a better deal on this thing? So if you dig into it a little bit, it really can be beneficial, and it really can save you a lot of money, and Medicare.gov is a great resource.
Jason: Brian, we have a couple minutes left. As you’ve been researching Medicare, Medicare Advantage plans, if you were trying to give advice to your mom or your grandmother about the best route for them to go, what would you tell them? What kind of advice would you give?
Brian: Well, I’d want to know what my day-to-day experience would be. I’ll answer this question on two levels, because again, I think you should be talking to Medicare, your doctor primarily, but from what I’ve learned from talking to the experts, walk through your day-to-day experience, your own healthcare experience. What are you getting? What are you seeing you need? Do you need a referral to see a specialist? If you had to go to the doctor’s, or go to the emergency room, what’s the policy with my plan? What does it cover? What doesn’t it cover? What percentage of coverage do I get?
Brian: These rules, that’s the thing about Medicare, Medicare Advantage. The rules do change every year, which I do not think is a good thing. But they do change, so you really have to, in my opinion, go to your doctor. He or she knows you best. And say, “Here’s, you know what my life is like. I come see you often enough, and if you can jot down a couple things for me to go back to pick out a good plan, what would you suggest? Most doctors are doing this. I talk to a lot of doctors covering Medicare, and they’re saying, “You know, we’re pestering the federal government to do something about Medicare and Medicare Advantage, and they’re trying. They’re coming up with some things like the do-over and the”, as I said earlier in the call, “The options about more services, and lower pay, but we doctors have to do something, too.”
Brian: So I see them, I see healthcare clinics, I see doctors’ practices, I see hospitals becoming more transparent and more aggressive, if that’s not too harsh a word, about making sure they’re walking their patients through this experience so they can make the right choice when they choose a plan. I don’t think that was the case 20 years ago. It doesn’t apply to me because I’m too young, but I have a mom and a dad and grandparents, too, and it just seems like there’s so many options. And as you mentioned earlier, all of it’s online, which you may not be comfortable using all the time, 100% of the time. It gets overwhelming. Start with your doctor, start with your nurse. Start with your family. Use Medicare. Call them. They’ve staffed up customer service levels significantly, by the way. So it’s not hard to get through.
Brian: You can go online, and-
Jason: These poor doctors, though.
Brian: It’s easy to do.
Jason: We’re asking, the doctors, we’re asking them to practice medicine. That’s what they’re in business to do. And now what you’re saying is we’re asking them to be insurance advisors, as well, and that’s just wearing a lot of hats. And then the doctors are saying, Jeez, you’re paying us less money than you ever had on reimbursements, and you’re asking us to do more, but I guess that’s the world we live in. But Brian, thank you so much for being a guest on Sound Retirement Radio.
Brian: Oh, no problem. [crosstalk 00:24:07].
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