Medicare: Big pitfalls to avoid, part 1

Hey there —

Our first podcast episode about Medicare — covering things to know before signing up — had a subtitle: “This one kind of blew our minds.”

There is so much to know — so many potential pitfalls and complications. And it left me thinking: “I’ll need to do some serious planning, years before I turn 65.”

So: please pass this newsletter to anyone you know who’s within a decade of that age.

Actually, pass along this newsletter and upcoming ones: It’s gonna take a few installments, just to cover the basics.

Signing up for Medicare can involve some unpleasant surprises. For one, it’s not actually 100-percent-free health care for the rest of your life. Pretty much everybody pays a monthly premium — $185 this year, for traditional Medicare.

And there are a ton of complicated — and sometimes costly — decisions and deadlines.

This time, we’re looking at the biggest, most-consequential choice: Which kind of Medicare to sign up for.

There are two basic flavors of Medicare — traditional Medicare, run by the federal government, and Medicare Advantage, which is funded by the government but run by private insurance companies.

You have to pick one when you first sign up. And for reasons we’ll get into, we want to flash a big yellow caution light about choosing Medicare Advantage.

The pitch for Medicare Advantage

Medicare Advantage gets a ton of marketing. In one survey, three quarters of seniors said they saw at least one ad per day. A third said they got flooded with telemarketing calls — seven or more every week. And in some cases, “workshops” offered by insurance brokers amount to a Medicare Advantage sales pitch.

And Medicare Advantage can look really attractive.

That because traditional Medicare comes with price tags and limitations most of us don’t expect. There’s a deductible. And exclusions — like dental, hearing, and vision coverage.

But most importantly: For most medical services — pretty much everything but inpatient hospital stays and meds — traditional Medicare only covers 80 percent.

To cover that last 20 percent, you need to pay for a supplemental policy — often called “Medigap.”

And you want that covered. Think about 20 percent of a bill for cancer treatment. Outpatient surgery? Chemo? Radiation? Scans and tests?

Sarah Jane Tribble, a reporter from KFF Health News who taught us a ton about Medicare, summed it up for me.

“You could pay out the wazoo,” she said. “It could bankrupt you.”

Medicare Advantage plans pitch themselves as an antidote: No need to buy Medigap. Everything’s covered in one policy, often with a low premium. And they can promise to cover things traditional Medicare doesn’t — dental care, vision, hearing.

The catch with Medicare Advantage

Medicare Advantage plans come from for-profit insurance companies like United Healthcare — and they come with all the usual baggage.

Like denying care. An Inspector General’s report looked at a random sample of Medicare Advantage denials, and found: One out of every eight denials was for care that the plans are supposed to cover.

And limiting your options. Not just doctors, but hospitals. The main hospital near my 95-year old mom just stopped accepting United Healthcare’s Medicare Advantage.

Which leads to another familiar piece of insurance company baggage: They can change the deal on you any time. Stop working at your local hospital. Or just stop offering your plan, or reduce its benefits.

Traditional Medicare generally doesn’t come with these problems.

But choosing Medicare Advantage, you can get stuck dealing with that for the rest of your life. In most states, it’s a no-backsies situation.

Medicare Advantage, buyer’s remorse

Rick Timmins found a little growth on his ear, and thought “melanoma?” He says he has a family history with skin cancer, and his primary-care doc thought it was worth seeing a specialist.

But he says it took him six months of calling his Medicare Advantage plan — and calling, and calling— to get their OK.

“It was not a fun time,” he told me. The bump on his ear haunted him. “It was growing, and it was sore, and you know, I was frightened. It’s like you can’t think about anything else when you’re wondering about what’s happening with this little lump.”

He wanted to switch to traditional Medicare — but without a Medigap supplement, he wouldn’t be able to afford care. And a Medigap supplement seemed out of reach.

Because in Washington, like most states, companies can refuse to sell you a Medigap policy if you have a pre-existing condition.

“It’s sort of shocking, actually, right?” says Sarah Jane Tribble.

“The Affordable Care Act passes and makes it so that everybody with pre-existing conditions can get insurance no matter what — but it leaves out the people who might need that the most, who are 65 and older.”

Robert Wolpa in Texas also has buyer’s remorse with Medicare Advantage. He’s managing HIV, high blood pressure, and cardiac issues — and he finds himself on an exhausting, never-ending round of phone calls to get referrals and pre-authorizations.

He’s managing for now, but he says he can’t do that forever.

“I think to myself, you know, I’m 71,” he says. “I’ve got a little of the HIV [cognitive] crap. My short-term memory is gone.” He worries about what comes next.

Which it’s why it’s worth thinking about signing up for your older, probably sicker self when you enroll. And planning for all this years before you turn 65.

Like, if you hope to retire, you may want to think about: How can I plan to have enough income to afford one of those Medigap policies?

Oh boy, that’s scary. Now what?

First, congratulate yourself. You’ve just taken the most-important step: Starting to get educated. And you’ve faced the scariest part.

Next, we’ve got some resources for you. There’s stuff to read, and people to talk with — whether you’re trying to understand your choices, or to advocate for your rights if you get in a jam.

The Medicare Rights Center has amazing information online, and a hotline that takes 20,000 calls a year. We spoke to their director of client services for our episode and learned a ton. (BTW, she doesn’t think Medicare Advantage is always the worst choice. But tread carefully.)

Every state has an agency you can call to help you navigate your Medicare options. They’re called SHIP — for State Health Insurance Assistance Programs — the A is silent, we suspect. Head to shiphelp.org to get connected to the program affiliated with your state.

And: We’ll be back soon, with more Medicare stuff — less terrifying, but still super-important to know — and more resources.

Till then, take care of yourself!

— Dan