Why do they want you on a Medicare Advantage Plan?
They want you to be on a Medicare Advantage Plan because it is more profitable for both the Insurance Companies and for the Government.
I know…that sounds crazy right? No, and here is why. So when you join a Medicare Advantage Plan and basically leave the government Medicare system to allow a private Insurance Company to manage your Medicare, you are basically off Medicare’s books. That means less administrative cost for the government. They basically pay the Medicare Advantage Company a monthly fee and you are all theirs(more on the fee in a minute). So now the government can hire less employees, and use less resources which is good for them. Pay attention to Medicare.gov and the “Medicare and You Handbook”. They, in a sly way, try to play up the benefit of a Medicare Advantage.
This should worry you; Why Wall Street Loves Medicare Advantage Plans!
Medicare Advantage Companies
So who are the Medicare Advantage Companies and what do they have to provide? Great question, and the answer is they are simply Private Insurance Companies who contract with the government to give you benefits that are as good as Original Medicare. The standard does not say the benefits have to be 2x better than Original Medicare, it doesn’t say they have to give you extra benefits, it states that they must offer benefits as good or better than Original Medicare. That is a pretty wide open standard. That is also why there are roughly 2200 Medicare Advantage Plans in the United States. Every state and often counties and regions have a different version of a Medicare Advantage Plan. Basically it is what the Insurance Company wants to offer and that is often dictated by competition.
Urban Medicare Advantage
These are often the best plans because there is so much competition for your business. Often there is no premium. And there are extra benefits like dental/vision, gym memberships, OTC Medications thrown in. That’s because you have up to 20 companies in large Urban Areas competing for your business. They want you because they get paid well from the government and are willing to have benefit wars to get your business.
Rural Medicare Advantage
Rural plans are usually not as generous. As a matter of fact they often have monthly premiums and do not include all of the extra benefits. The reason is there is much less competition in the rural areas. It is much harder for the little Medicare Advantage Companies to set up networks so they often will not offer their plans in the rural areas. Therefore the larger companies, the United Health and Humanas do not have to make their benefit packages as rich to gain clients. (By no means am I talking bad about Humana and United. I write for them and they are good companies. They are just two of the biggest players in the Medicare Advantage Industry).
How much money to Medicare Advantage Plans get paid to manage your Medicare?
That is probably the best question. So, from my years being in this business and having an inside look behind the curtain I know they make between $300-$1500 per month per person that they have enrolled in a Medicare Advantage Plan. The reimbursement depends on what type of plan you are on and where you live. Typically speaking if you live in a larger metropolitan area the company is reimbursed more. If you are on enhanced benefits because you have Medicaid, They are also reimbursed more. So your Medicare Advantage Company is receiving between $3600 and $18,000 per year to manage your Medicare benefits. On top of that you have co-payments for everything up to $6700 out of your pocket in a year. Not to mention you can only go to the Doctors and Hospitals they have negotiated a contract with. Their objective is to pay those facilities as little as possible for your healthcare.
As a broker and a consumer myself I would strongly encourage you to look at your options and the motivation of Medicare advantage Plans being strongly pushed. Why do you think most of the commercials on TV are for Medicare Advantage and not Medicare Supplements? He who makes the most money has the greatest advertising budget. Any of my clients that know me will tell you I usually will recommend a Medicare Supplement. It has nothing to do with commissions or some other financial motivation. It is clearly the best hands down product you can get. Example, you can pay about $140/Month for a Plan F give or take $10. That is $1680 per year and you are assured not to pay another penny for your healthcare the remainder of the year. No payments for Doctor visits, Surgeries, Hospital Stays, Home Health, Lab Work, MRI, and best of all No Networks. You are free to manage your health at a reasonable cost with no unexpected charges.
Give us a call today and we will give you all of the free advice and literature you need to make the best decision for you. 800-708-5810