'Our Seniors Deserve Better': Jayapal Demands End of All Medicare Privatization Schemes

[Ms. Toad]

31. Stop repeating false claims about original medicare

As I have repeatedly told you, the only difference between the grandfathered plans and the current plans: $233 in coverage. That's it. Period. The only thing it is impossible to cover in the new plans, which it was possible to cover in the old plans, is the annual deductible (currently $233).

I even went to the trouble of providing detailed data - and you have yet to provide contrary data, based on actual premium/plan research. Yet you continue to make false allegations about both the cost and coverage of original Medicare.

My parents (25 years ago) - and my spouse (this year) - had full access to the purportedly fantastically better grandfathered plans. Only one of them chose the grandfathered plan because the added premium cost of the grandfathered plans was more than the benefit. My mother is the sole one of the three who chose the grandfathered plan - because she didn't want to have to think about paying anything more than premiums. The remaining 2 did the research, compared overall costs for the year, and chose one of the plans still available to everyone.

I didn't have the option of a grandfathered plan, but wouldn't have chosen one had it been available. I have the ability to do basic arithmetic. I would not have chosen to pay ~$300 more in premiums to save $233 in out-of-pocket costs.

I am on original Medicare - as of 1/1 (so none of the purported fancy-schmancy grandfathered plans). My plan is as close to the grandfathered plan as I could purchase (leaving me with a maximum of $233 out-of-pocket expenses).

So far this year, I've had $33,551 in medical expenses this (and will have a few thousand more by Friday when I have my quarterly and annual scans for the two cancers in active follow-up). My total medical spend is $1823.60 (6 months of premiums + $233). My total medical spend for the year (regardless of how much more medical care I need) will be $3414.20 (12 months of preiums + $233).

The $0 premium Medicare Advantage plan from the same insurance company so far this year would have cost me $1020.60 in premiums, alone (Part B premium of $170.10 x 6 months). In addition, my out of pocket expenses so far this year would have been roughly $1445. That brings my total spend under the $0 premium Medicare Advantage plan to $2465. 60. (Already $642 MORE than the best currently available original Medicare supplement at the 6 month mark.) Each additional medical encounter for the remainder of the year under a Medicare Advantage plan will cost $$, until I spend $4,500 (the out-of-pocket max). Friday's visits will cost $290. That brings me to $3776.20 for the year in known expenses (Friday's visits + the remaining 6 months of Medicare Part B). That means even with zero medical expenses beyond Friday, by the end of the year I will have spent $362.1o MORE on my $0 premium Medicare Advantage plan than on my $95 premium origtinal Medicare plan.

And it gets worse.

My total medical spend on the comparable $0 premium Medicare Advantage plan will continue to grow with each medical encounter - as high as $6541.20 - $170.10/month + $4500 in max out-of-pocket expenses (That is potentially $3400 MORE for the $0 Medicare Advantage plan than for my ~$95 Medicare Supplement plan - based on actual expenses to date, and known expenses for the remainder of the year.)

I didn't choose the most expensive plan for the comparison - I chose a $0 premium plan offered by the insurer whose Medicare Supplement plan was the cheapest. So the cost/benefit should be equivalent.


The problem most people I have had specific conversations with about the "high" costs of original Medicare believe the costs are exorbitant because they chose the cheapest alternative at the time they enrolled in Medicare (Hey - insurance for "free," why not?)

They never seriously explored the comparison between the two until being diagnosed with a serious illness which resulted in out-of-pocket costs of up to $11,300 for one or more years. (Note: The plan I used for comparison does not pay for out-of-network care at all, and has a lower than permitted cap on out-of-pocket expenses). Once they realize they can't keep paying the full out-of-pocket max each year, they explore trying to get back to original Medicare (for which the maximum out-of-pocket on the two most popular plans is $233 and $233 + $20/doctor's visit). They are either denied coverage (or find their coverage limited to lower-quality plans which have higher out-of-pocket costs) OR are offered a plan at ~5 times the cost had they enrolled at the time they enrolled in Medicare.

The pricing is intentionally designed to make it more expensive to decide, when times get tough, to opt into original Medicare. The los cost for both Medicare and Medicare supplement plans is maintained by having everyone who is eligible opt into the system - whether they currently need lots of care or not. (Same theory for the mandatory enrollment in an ACA plan - unless everyone is enrolled, the price of care for those enrolled will force premiums out of the affordable range.) That opt-in date is when you are initially eligible. After that - it's just like trying to find insurance before the ACA with a pre-existing condition: It's not available OR they charge you an arm and a leg.

The problem is that the process (and consequences of not opting in) are so hidden that the plan is not an effective carrot. If you don't know you are giving up a once-in-a-lifetime opportunity when you opt out of original Medicare it shifts more people into the facially attractive $0 premium Medicare Advantage plans. Most people are still relatively healthy at age 65 and can't imagine ever needing enough medical care to hit the out-of-pocket maximum, the premiums for the plans are hard (sometimes impossible) to get without engaging an insurance agent (who makes her money by selling the plans - so has a motivation to sell a more expensive plan), and most people don't have a solid enough handle on their actual expenses to do the numbers (like I did above) to compare total out-of-pocket expenses for the year. So they are comparing premium to premium - not total cost to total cost.

Original Medicare doesn't need major fixes. It does need to be tweaked so it treats dental, vision, and hearing as the medical problems they are. And - applicable to both Medicare Advantage and original Medicare - drugs need to be treated as part of the basic plan (not an add-on, uncapped plan, with a donut hole).

In addition, they need to develop educational tools which are readily available, geared to no more than a 10th grade comprehension level, and delivered to everyone on their 64th birthday (in time for ample consideration of the once-in-a-lifetime decision on their 65th birthday). Further, becasue the information is hidden - and of such poor quality that three of us with JDs each originally misunderstood parts of the program (and one still has some serious misunderstandings which I hope don't come back to bite her in the butt) - there should be an amnesty program to allow anyone stuck with only expensive options for original Medicare to enroll at the initial enrollment price for their age (without taking health status into account).