Medicare Advantage is a special type of Medicare. It’s designed to save the government money while still meeting the promise of covering your healthcare costs to your satisfaction. Funny thing is, for a government program, it actually works . . . and here’s how.
How The Insurance Company Gets Its Money
If you are enrolled in a Medicare Advantage program, the government gives your insurance company a payment every month to cover the cost of your healthcare. If the actual cost of your healthcare is less than these monthly payments, then the insurance company keeps the profit. If the actual cost of your healthcare is more, then the insurance company takes the loss. It’s that simple.
Since the insurance company is on the hook for your healthcare costs, it can only do two things to decrease the chances that it will lose money: it can maximize the amount of the payment from the government and minimize the amount spent on healthcare
The payment from the government is based on two things. The first is on your age, sex, address, and the reason you are eligible for Medicare. The second is how sick you are. Your sickness is determined by the information the government gets from you doctor. His insurance company has a lot riding on his capturing every last piece of information. Sometimes this information can be overstated, that is why you should always check your medical information for accuracy when you can.
After the amount of that payment is figured out, the government then gives the insurance company an extra percentage based on how well they treat their customers and whether patients get their routine healthcare, like breast and colon cancer screenings. That explains one of the big down-sides of these insurance plans, they are always bothering you about these screening metrics; they just won’t leave you alone.
How the Insurance Company Spends Its Money
Your insurance company knows that if you have your own personal clinician, you will spend less money on your healthcare. So under a Medicare Advantage plan, you are usually required to select a personal clinician or PCP. Now PCPs got a bad name during the HMO era of the 1990s, where they were referred to as “gate-keepers”. That was too bad, because, who doesn’t want their own personal clinician? One who knows you well, who has the same values and will look out for you when things go wrong.
Well, Medicare Advantage does a pretty good job of keeping the good stuff about PCPs and preventing the bad. First, the insurance companies try to keep it affordable to see your PCP, although often at the cost of much higher copays to see a specialist. Also, you have to get a referral from your PCP to see a specialist, but hopefully that only happens after you and your PCP have tried to work things out first. As a family doctor, I’m trained to handle most things and recognize those that I can’t. That’s not gatekeeping, that’s just good medicine. Some folks walk into my office with a list of specialists that they want to see. After I gently explain to them my role as their personal physician and the costs associated with their requests, they usually come around to allowing me to take the lead. Long term, consistently heavy speciality use under Medicare Advantage can be especially costly to patients.
Your insurer also tries to limit the individual, specialists you can see under your insurance plan to the ones they consider most cost effective. If you have a favored specialist, you should always call and speak to their office manager to make sure they are in, and will stay in, the insurance plan you are thinking about.
You must be aware and comfortable with the fact that most Medicare Advantage plans pay your PCP, at least in part, based on how much money is spent on your healthcare. This is balanced out because both you and your PCP benefit when you stay as healthy as possible. That way, you end up with the very best of care and that care can continue to be delivered in a sustainable way.
You Can’t Have It Both Ways
See there are two basic ways the government is trying to cut how much it spends on healthcare. With regular Medicare, they are reducing, and I mean really reducing, how much they are paying your doctor to care for you. The government pretends that doctors can avoid the pay cuts if they meet certain goals. But those goals are just like the tax laws, hard to read and impossible to understand, so the doctors are going to end up getting a whole lot less. In response they are either going to stop taking Medicare patients or see a LOT more of them, which means LESS time with you.
With Medicare Advantage, the other way the government is trying to save money on healthcare, they outsource it to private insurance companies. These insurers then try to encourage your personal doctor to take care of the things they are trained to take care of, and give them some of the money saved as a result. That’s essentially how the insurance companies try to limit how much they spend on healthcare—by making sure everyone’s interests are aligned in the same way. After all, since specialty care is so expensive under Medicare Advantage, if your doctor is able to take care of things without sending you on to a specialist, you’ll pocket some of that savings too. And if you think your doctor would deny you needed care just to save a buck, why are you going to her in the first place?
And those are your only options. If the Federal government is going to pay for your healthcare, you’re going to have to either see a doctor who is rushing to see ever more patients while banging on the computer or one who earns his keep when you (and your insurance company) save money.
It’s one or the other.
Now you know. And you can make your choice.