Your health, longevity, and medical costs are some of the most difficult to predict aspects of financial planning. Insurance is supposed to alleviate some of the unpredictability of the financial outlay. Unfortunately, a recent report from the U.S. Department of Health and Human Services has found that Medicare Advantage plans have often denied care for procedures that should be covered by the insurance. And, the are not paying all eligible claims.
The federal government’s audit of Medicare Advantage Plans found evidence of “widespread and persistent problems related to inappropriate denials of services and payment.”
What is a Medicare Advantage Plan?
Medicare Advantage Plans are private alternatives to to Medicare. These plans are often cheaper with a greater range of benefits than traditional Medicare coverage from the government.
About 28 million people have a Medicare Advantage plan, doubling over the last decade.
Medicare Advantage insurers are paid a fixed amount per patient by the federal government. The report concludes that the fixed payment agreement provides, “the potential incentive for insurers to deny access to services and payment in an attempt to increase their profits.”
As an online commenter wrote, “they are disadvantage plans. They are effectively an HMO, and like in an HMO, the sponsor maximizes profit by minimizing care.”
While many people insured with all kinds of Medicare programs are happy with the coverage and the availability of services, the government report revealed serious problems.
The fed’s analysis found that in 13% of the cases where care was denied, the service was actually medically necessary.
The most frequent denials were for MRIs and CT scans.
Long waits for approvals are also problematic.
The report also found that Medicare Advantage plans refused to pay about 18% of claims that the auditors deemed legitimate.
Medicare officials said in a statement that they are reviewing the findings to determine the appropriate next steps, and that plans found to have repeated violations will be subject to increasing penalties.
First things first, it is critically important to understand your options for Medicare coverage and to select the right plan for you and your healthcare needs. Furthermore, you should be prepared to re-evaluate your coverage annually.
It is your health and you need to advocate for yourself. If your doctor is recommending a procedure and insurance is denying it, start asking questions. Get second opinions. Appeal the decisions.
Medicare provides a video and tips for your appeal.
According Fidelity Investments, a 65-year old couple retired in 2021 can expect to spend $300,000 in out of pocket health care and medical expenses throughout retirement. And, that value does not include long term care which is not covered by Medicare.
The NewRetirement Planner can help you estimate your healthcare costs.
- Get a personalized estimate for all out of pocket Medicare expenses based on your age, health status, the type of coverage you want, and your location.
- Explore ways to cover long term care.
- See your annual healthcare costs in charts and how they rise near your longevity.
From Health Savings Accounts to using services from a dental school, explore 12 ways to save on retirement health costs.