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Nate Kaufman
This is Nate Kaufman with the Healthcare Bridge, welcoming Rich Helppie, the founder of The Common Bridge. We're here today to talk about Medicare; it's known as Medicare Advantage. Rich, you have another name for this thing.
Richard Helppie
I call it Medicare disadvantage, because if you pick unwisely, Medicare disadvantage could kill you or it might trap you inside and you never can get out. Now Nate, you and I have talked about this a lot. Traditional Medicare Part A, it's free, it's automatic. Part B, that's for your outpatient services, physicians, that's paid for on a sliding scale. It's an 80-20; usually pays 80% of covered charges. With that you need a Medigap plan - that's a private insurance. And then, of course, Medicare Part D (Editor's note: Prescription Drug plan) - which I'm a big advocate of Medicare Part D - I think it's a well designed plan. Medicare Advantage plan (Editor's note: also known as Medicare Part C), here's the pitch: you get little or no premium, you get added benefits like vision, dental, hearing and maybe transportation, a gym membership, and over the counter drugs. Doesn't it seem a little odd that you could get so much more healthcare for so much less money? Does that sound possible? Like they say, if a deal sounds too good to be true, it probably is.
Nate Kaufman
Well, actually, there's another saying; if you think health care is expensive, wait till it's free. The bottom line is that if you look at Medicare Advantage, the stocks - United Healthcare, Aetna - have all declined materially, and the reason they've declined is that sooner or later, people get sick. The issue with Medicare Advantage is there are a number of ways - I'll call them loopholes, not cheats - that you can find that will end up resulting in you getting paid more. One of them is representing how sick a patient is. That actually increases the amount of money you get from the government. The insurance companies take lots of their money and invest in trying to make their patients look as sick as possible to the government so they get more money. Well, those days are limited because the government, after decades, has figured that out. You take that loophole away and a few others, and now you have a bunch of sick people that you have to pay money to.
Richard Helppie
That's one way to manipulate the system. We both have learned about people that said, Hey, what is this? I've got congestive heart failure, I never knew I had that. Because some enterprising clerk put that diagnosis into the record. So again, the distinction is Medicare Advantage. Medicare disadvantage is that the insurer gets paid a per member per month fee by our government by the tax dollars, and that fee is set based on how ill that person is. But guess what else that you buy when you buy that Medicare premium? You buy a gatekeeper, don't you?
Nate Kaufman
Well, you most of the time you buy a gatekeeper, but more and more the gatekeeper is the insurance company. And so the gatekeeper concept was you had to go to a primary care physician, get a referral in order to see a specialist. That was kind of a good idea because the gatekeepers were doctors. Now what happens is, when you need to go to a specialist or get a procedure, that information is transmitted back to Minnesota or back to Indiana and some AI system determines whether it's necessary or not. Then a physician spends a few seconds reviewing that to see if he or she confirms. And as a result, there are huge delays and denials in the system. For every delay and denial of care, the insurance company actually makes more money because of the conflict of interest associated with; I got my premium, if I don't have to provide for care, my shareholders make more money.
Richard Helppie
Now contrast that with traditional Medicare. Let's just take this generic example. A Medicare patient on traditional Medicare is referred to a specialist at a research hospital - Memorial Sloan Kettering, Mayo Clinic, MD Anderson, of course, the University of Michigan - and they have their traditional Medicare and the physician at that research hospital is willing to see them. What's the difference in the process versus somebody that's coming from southern Ohio with a Medicare Advantage plan trying to go to one of those specialty research hospitals?
Nate Kaufman
Well, what happens is you have to go to what's known as an in-network provider. Let's talk about another loophole. You have to have an adequate network for your population and the problem, basically, is who's measuring adequacy? So they've done some studies where they see that insurance companies are creating ghost networks. That is, they list a number of providers that actually aren't available to provide care. That's first and foremost. The second thing is you can't go where you want if you have cancer. You can't just say, Hey, I live in Oklahoma, I want to go to Johns Hopkins, which you can under traditional Medicare. You essentially have to go in-network, which means choosing somebody locally. What's happening because of the delays and denials and the underpayments coming from the Medicare Advantage plans, many, many of the really good doctors and hospitals are dropping out of Medicare Advantage. And keep in mind, once you're in Medicare Advantage for a year, if you leave, your supplemental plan is no longer based on the community. It's based on your own personal healthcare. So if you leave because, say you've got, I don't know, pancreatic cancer, your supplemental plan is going to say we're covering this person, except for pancreatic cancer. So for that reason, because I'm on Medicare, I see no good reason at all to let a for-profit insurance company set my network, tell me where to go, tell me which care I can have, etc. So I just encourage everybody to stay out of it.
Richard Helppie
The term of art that those of us on the inside know, it's called a narrow network, and the way that the insurance provider can dictate price is to tell the health systems that you want to go that they're not in-network. They're saying we won't send you our patients if you don't meet our price point. Therefore, while you might want to go to Johns Hopkins, you've got to go to ABC Hospital, which may have substandard care compared to Johns Hopkins; probably would with specialties like that, versus if you have traditional Medicare and you have a diagnosis, a provider is willing to see you. That's all there is to it. The doctor makes the decision. The patient makes the decision. Now, of course, Medicare has its rules, but you've already got the diagnosis in hand, and most doctors, most hospitals accept Medicare. And once you accept one, you've got to accept all Medicare patients, so you're going to have much more choice with traditional Medicare.
Nate Kaufman
Yeah. I can't emphasize enough how important it is to select your providers properly. I just had a colleague recently who had this strange illness just pop up. The ambulance took her to the local community hospital, and they basically said, we better ship her to University of California San Francisco right away or she's not going to make it. The fact is that that is not an inexpensive hospital to be transferred to, but had they not done that, she probably wouldn't have survived. Again, we want people who are informed to make decisions about our healthcare, not AI and remote physicians that really have no experience with a particular patient.
Richard Helppie
I think we've landed in the same place, Nate. Medicare Advantage, while it looks like it's such a good deal, you're buying a narrower network. You're buying a gatekeeper that can deny you care, and you're dealing with someone whose incentive is to delay your care. Now that's not to say that there aren't good plans out there. Some people are very satisfied with them, but guess what? Next year, your network can change, so if you like your doctor maybe you'll keep them, maybe you won't. Indeed, that happened here in Michigan with us. Got a notification that they were having difficulty getting the Humana Medicare Advantage patients eligible because they were having negotiation issues with Humana. We're not in that plan, but our doctor said if you're in that plan, you need to be alert. Again, that is not the Humana prescription drug plan, which works really well, but the Medicare Advantage plan part of it. So again, if you're put off by the premiums that you might have to pay under traditional Medicare, remember, you're going to get what you pay for, which is a very broad network and your ability to control your own destiny much better than these Medicare disadvantage plans.
Nate Kaufman
I absolutely agree. You essentially get what you pay for. At the end of the day, when you're sick, you want those options that you don't have if you're locked into a Medicare Advantage plan. Again, Medicare Advantage is a great idea that's gone bad. So while there are people out there that are reasonably happy with their plan, the concern is, if you get sick, you need options, and you can't have options with Medicare Advantage. Anything else, Rich, that you want to mention?
Richard Helppie
For those people that are listening that are coming up to Medicare age, four parts: Medicare A, you get that automatically, Medicare Part B, definitely sign up for that. You'll need a Medigap plan to cover what A and B don't cover and depending on what market you're in, it'll be a Blue Cross or a United or whomever; and then Medicare Part D. Medicare Part D, very important to sign up for that when you become eligible, because even if you're not taking any prescription drugs, if try to opt out, there's a big catch up premium if you try to come back in later. Medicare Part D is very well designed plan. In a perfect world, I'd make everybody eligible for Medicare Part D, but that's probably a subject for another day.
Nate Kaufman
There are a lot of nuances in healthcare, that's why it's important to ask an insider, and that's what we are. This is Nate Kaufman and Rich Helppie with the Healthcare Bridge, signing off.
