Some Retirees Aren’t Allowed to Choose Between Medicare or Medicare Advantage
After the age of 65, Americans are generally allowed to choose between traditional Medicare or a private health insurer’s Medicare Advantage plan (also called Medicare Part C). However, it is becoming increasingly common for retirees with health benefits from their former employers to not be given a choice.
Instead, these retirees are told that they are only allowed to enroll in a Medicare Advantage plan. Often, this plan has a limited network of doctors and hospitals. In many cases, such individuals would choose traditional Medicare but are being forced into a more restrictive plan. Those who reject the plan are often told they will lose their retiree health benefits, sometimes permanently.
Shifting to Medicare Advantage only
A recent report found that 12 states now only offer Medicare Advantage to their Medicare-eligible retirees. This number rose 50% from 2016 which means more states are likely to join in. While Virginia is not yet among the states that only offer Medicare Advantage, 12 others do. These include Alabama, Arizona, Colorado, Connecticut, Georgia, Illinois, Kentucky, Maine, Missouri, New Hampshire, Pennsylvania, and West Virginia.
Today, only 21% of large employers offer health benefits to retirees. In 1988, 66% of big employers offered benefits. Two-thirds of those large companies that offered retirees Medicare Advantage in 2023 didn’t permit them to enroll in traditional Medicare. In 2022, 44% of those companies allowed retirees to enroll in Medicare Advantage only.
Shifting to Medicaid Advantage can save money for the companies as well as state and local government employers. The Office of the Mayor of New York City estimated that switching 250,000 city employee retirees would save around $600 million annually.
What are the tradeoffs for Medicare Advantage?
Medicare Advantage plans usually have benefits that are not available under traditional Medicare. These include dental, vision, and hearing. Medicare Advantage plans also have lower out-of-pocket costs when compared to traditional Medicare and Medigap supplemental plans.
However, on the downside, Medicare Advantage plans have premiums. Only three states offer $0 premium plans for retirees initially. Most of the 12 states that require individuals to take Medicare Advantage as their health insurance do not provide $0 premium plans.
In addition, many seniors encounter delays and possible treatment denials due to prior authorization, a cost-control technique that requires beneficiaries to get preapproval from the insurer to cover medical costs. Traditional Medicare rarely requires prior authorization. This is placing a strain on hospitals which are becoming increasingly frustrated with claim denials. Many say they won’t contract with the Medicare Advantage plan because of the proliferation of prior authorizations.
For some rural retirees, they may not have a doctor in their area that is willing to participate in Medicare Advantage plans.
Talk to a Virginia Beach Elder Law Attorney Today
The Law Office of Angela N. Manz represents the interests of seniors who are estate planning for long-term care solutions. Call our Virginia Beach estate planning lawyers today to schedule an appointment, and we can begin discussing your best moves right away.
Source:
fortune.com/well/article/medicare-advantage-retirement/
