PS to Medicare Advantage and to the AARP

Some additions and corrections to the piece I wrote 7/18/08 about Medicare Advantage (MA) insurance taking a hit from Congress:

For one thing I blamed media for not being on top of this, when in fact it was the private insurers such as Humana that should have been alerting everybody - most of all their own subscribers. But I, a Humana subscriber, still haven't heard from these folks about what happened in Congress or what it means to subscribers. That's pretty disheartening.

I also blamed AARP for instigating a massive panic attack among oldsters who were led to believe their medical services were at risk. In doing so, I implied that AARP did not sell MA.

A reader corrected me on that one and caused me to spend hours of research on the AARP and what it sells. Turns out AARP does offer an MA plan, but you have to know what you want and you have to aggressively search to find it. Meanwhile their other types of insurance are shoved at members from every angle. I suspect that the best profit for AARP isn't in MA but in Medicare Supplement (or Medigap) insurance.

AARP makes clear in its advertising of health and other types of insurance that it is not an insurer - as though AARP is merely offering these plans as a favor to members.

However, if you sort through the AARP financial statement offered in pdf format at this link you can read there - Note 3, page 12 (and in another place) how AARP sells insurance without underwriting it: It collects premiums, skims off a part of the profit, and remits to insurance underwriters.

On that same page it reports a haul for AARP of $497,635,000 for this part of its business. Compare that with membership dues bringing in $297,353,000. Note, too, that AARP has divided itself into various branches, some of which are not of the non-profit variety.

Medicare Advantage took a hit while the press slept

While Congress and President Bush were talking about taking money away from Medicare Advantage subscribers and giving it to physicians, the press wasn't paying any attention, not that I detected. They weren't paying attention until it came time to pontificate about the righteousness of it, which is when The Advocate and some others gave it their editorial approval.

I doubt they understood the implications of what they were preaching, or backed their editorial positions by interviewing beneficiaries of different types of health plans.

Further, I doubt if Congress - including Senators Voinovich and Brown and Representative Space - understood what they were taking away by giving Medicare Advantage money to physicians. President Bush understood it and vetoed the bill because he said he favored paying physicians in full but getting the money to do so from a source other than Medicare Advantage providers.

He was shouted down by legions of AARP members and others who were whipped into a frenzy of ill-placed support, thinking they would lose medical services if physicians didn't get what they demanded. But what they probably didn't realize is that AARP is a seller of "Medigap" Medicare insurance and stands to lose sales to Medicare Advantage. In fact, if you read AARP stuff it's pretty easy to see that more than anything else the AARP is in the insurance business - period - with sales aimed at older people.

The differences among health plans available to seniors are complex and obscure, which is why special-interest insurers, such as AARP, find it easy to snocker old people such as me. Since I heard about the implications of the congressional override of the President's veto about three days ago, I have been trying to find out who the players are, what the score it, and what's at stake. I've spent hours on the Internet and elsewhere and I admit that I am still confused about some of it.

But you can count me among the extremely satisfied customers of Humana, one of the Medicare Advantage providers.

Here's how the Ohio Department of Aging (ODA) defines Medicare Advantage plans: "Unlike original Medicare, which is administered by the federal government, Medicare Advantage plans are provided by private insurers. The government pays the insurer a fixed monthly fee to provide services to each Medicare beneficiary under their care. Such plans are attractive because they offer the same basic coverage as original Medicare, along with additional benefits and services that original Medicare doesn't offer. They are designed to provide better services and lower out-of-pocket costs."

Some are better than others, of course, and some of these plans present some problems, but - again from the ODA - "Most Medicare Advantage plans, however, deliver as promised and have high customer satisfaction."

Count me among these folks. I've been a subscriber to Humana Gold Choice plan for about two years. It is affordable and user-friendly. It has health maintenance programs through education and such programs as "Silver Sneakers" (offering free membership at the YMCA, for instance) which are useful and greatly appreciated.

As for keeping up with medical bills, Humana is a Godsend. Unlike the old days of trying to find out what the insurance company has paid and what the government has paid, and what is still owed, Humana coordinates payment for health-care providers and communicates clearly about what's going on. Customer service by phone and Internet has, in my case, been perfect every time, and there are few if any other government or private services about which I can say that.

If the Medicare Advantage plans have indeed been submarined by this latest Congressional action, then there are a lot of seniors who may not know it yet, but who are about to lose money, lose time, lose some great services, and lose their tempers.