A Bad Medicare Advantage Decision – Again, the network matters

Every year Medicare has an annual open enrollment period which begins on October 15th and ends on December 7th for an effective date the following January 1st. This is the opportunity to change to a Medicare Advantage Plan from original Medicare, to move from an Advantage Plan back to original Medicare, or to change one’s Medicare Advantage Plan or Prescription Drug Plan. There is also an enrollment period from January 1st through March 31st when one can change Advantage Plans or return to original Medicare from an Advantage Plan and purchase a Medicare Prescription Drug Plan.

In other videos, we have described the various pros and cons of remaining in original Medicare or enrolling in a Medicare Advantage Plan. Today we want to focus on the narrower issue of selecting a Medicare Advantage Plan which is an HMO, the most restrictive type of plan due to its limited network.

If the network of providers in the Medicare Advantage HMO you are considering includes the medical centers where you would ultimately want to be treated in the event of serious illness, then that might be a good choice for you. But — we want to share the story of an individual who selected an HMO Plan and unfortunately was not well-served by that Plan’s network.

This client came to us in February. During her Initial Enrollment Period she enrolled in a Medicare Advantage HMO which had no premium other than her Part B premium. She was still 65 when she came to us but was just beyond the six-month period when a Medicare supplement can be purchased on a guaranteed issue basis. She had significant pre-existing conditions including heart failure. She could apply for a Medicare supplement but because doctors had already recommended a heart transplant for her, she would not be able to buy a Medicare supplement due to her health status. Not being able to purchase a Medicare supplement was a concern because Medicare Part B does not have an out-of-pocket maximum and purchasing a Medicare supplement essentially provides an out-of-pocket maximum for Part B expenses.

Further complicating matters, her doctors and family wanted the heart transplant done at Cedars-Sinai which was not in her HMO network. That meant no coverage for the surgeon or the hospital with her current HMO coverage. Paying privately for a procedure as involved and costly as a heart transplant was not a consideration.

We ultimately recommended a PPO product that had Cedars-Sinai and the transplant surgeon in-network with an in-network out-of-pocket maximum of $3,900 and a combined in and out-of-network maximum of $9,500. The premium for this plan was $22.50/month. We considered two PPO options. The PPO recommended was a regional plan. This was preferable to the more state-wide PPO because if our client could later have moved to an area not served by her regional PPO, she would have gained the ability to return to original Medicare because a move out of one’s Advantage Plan service area triggers a Special Enrollment for a Medicare Supplement on a guaranteed issue basis.

To our great dismay, our client did not survive a full month after becoming our client so was never able to take advantage of her new coverage which took effect March 1st.

Our message here is once again to be very aware of the network you select, in this case an HMO Advantage Plan, but honestly, this advice applies to the purchase or selection of any coverage. Many people want a greater choice of specialized hospitals when they are ill. And, remember, selling Advantage Plans is a lucrative business. The broker who sells a plan receives a commission for as long as one remains on the Plan. The motivation to sell can influence the pitch which probably happened in this case because, in our opinion, someone with such a serious medical history should not have selected a Plan with a limited network.

Another open enrollment season is upon us. Please shop wisely.