It’s Medicare Open Enrollment season from October 15 through December 7, and you should be reviewing your Medicare plan options to make sure you continue to get the coverage you want at the price you want. A new Commonwealth Fund paper explains why it is risky to trust the advice of Medicare insurance agents. It’s far better to talk to your State Health Insurance Assistance Program or SHIP before you make any final decisions.
Everyone with Medicare, whether enrolled in traditional Medicare or Medicare Advantage, will see their Medicare Part B premium increase in 2022. But, if you’re enrolled in traditional Medicare, you should see no other changes in your coverage or costs for medical or hospital care. If you’re enrolled in a Medicare Advantage plan, your in-network providers as well as your out-of-pocket costs could change dramatically. Your Medicare insurance agent or broker might be able to tell you about changes, but don’t rely exclusively on the agent’s advice.
Like all insurance agents, Medicare insurance agents have financial interests that are likely not aligned with your needs. For example, they might want to steer you to a Medicare Advantage plan rather than traditional Medicare, even if it’s in your best interest to enroll in traditional Medicare. They generally are paid a higher commission for enrolling people with Medicare in a Medicare Advantage plan than traditional Medicare with a supplement. They are paid nothing if you are in traditional Medicare and receive a lower amount if you enroll in supplemental coverage, “Medigap,” than if you enroll in a Medicare Advantage plan.
Moreover, insurers pay insurance agents different rates, depending upon the Medicare Advantage plan you enroll in. There’s little doubt that some will steer you to the Medicare Advantage plan that pays them the highest fee.
The federal government should not be allowing commission differences between traditional Medicare and Medicare Advantage, nor among Medicare Advantage plans. It leads to outcomes that can threaten the well-being of people with Medicare. It also hurts the traditional Medicare program.
Right now, the Centers for Medicare and Medicaid Services (CMS) sets a maximum amount for Medicare Advantage and Medicare Part D commissions. Agents receive commissions when they initially enroll people in Medicare Advantage and, then, when people renew. CMS does not set a maximum commission for the sale of supplemental insurance, but that commission is generally significantly lower by a couple of hundred dollars than MA commissions.
For these reasons, insurance agents cannot be trusted to give unbiased Medicare advice.
How to get unbiased Medicare advice? Every state has a SHIP, a state health insurance counseling and assistance program, which provides free, unbiased Medicare advice. SHIP counselors do not get paid more based on the advice they provide. You can find the contact information for your local SHIP at shiphelp.org or by calling 877-839-2675.
That said, if you do not have retiree coverage or Medicaid to fill gaps in traditional Medicare and can afford the cost of supplemental coverage–which can easily be $1,500 or more a year–traditional Medicare will give you far better choice of physicians and hospitals than Medicare Advantage and far easier access to care. Medicare Advantage plans impose financial and administrative barriers to care.
Unfortunately, it’s not possible to know which Medicare Advantage plans have high denial rates and delays, which have high copays, and which will cover your care from quality providers. So, choosing a Medicare Advantage plan can be a big gamble. It’s why people in Medicare Advantage plans who develop complex conditions tend to switch to traditional Medicare when they can, at disproportionately high rates. But, there’s a problem: They are often locked in. After you first enroll in Medicare, Medicare supplemental insurers do not have to sell you coverage, except in limited circumstances.
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