Medicare Advantage IS NOT Medicare

By John Ballard

• Medicare Advantage is a private, for-profit insurance product.


• Medicare Advantage is NOT Medicare.


• Various versions are sold from a number of companies, all competing for the business of Medicare beneficiaries.


• Medicare Advantage is NOT Medicare.


• Medicare Advantage is an insurance product designed to capture Medicare beneficiaries from the government. 


• Medicare Advantage is NOT Medicare.


• Once enrolled in a Medicare Advantage plan, a Medicare-eligible beneficiary is no longer able to use his or her Medicare card or Medicare account. It is replaced by a Medicare Advantage card and an account assigned by the insurance company administering their plan. 


• Medicare Advantage is NOT Medicare.


• Medicare Advantage plans cost taxpayers more than Medicare because in the same way that commercial banks receive extra money for servicing student loans, the insurance industry receives extra money for servicing Medicare beneficiaries.


• Medicare Advantage is NOT Medicare.

Those who claim Medicare benefits are being cut may not be lying because they may be speaking in ignorance, confusing Medicare with Medicare Advantage.

I know these facts to be true simply because I am a qualified Medicare beneficiary and I chose to enroll in a Medicare Advantage plan this year simply because there is NO PREMIUM!
What? No premium? How can that be?
Don't ask me. I have asked several people, including the agent from whom I got the plan, and he doesn't know. All he knows is that there would be a premium if I lived in another country a few miles to the South. But in the country where I live there is no premium... this year.  I discussed this mystery in another post last August when my wife and I graduated to Medicare.

Look at this from the Medicare website.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.

If you join a Medicare Advantage Plan, your Medigap policy won�t work. This means it won�t pay any deductibles, copayments, or other cost-sharing under your Medicare Health Plan. Therefore, you may want to drop your Medigap policy if you join a Medicare Advantage Plan. However, you have a legal right to keep the Medigap policy. [JB: What THAT is about I have no idea.]

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(==> About Medigap....Medicare has never paid the full amount for most benefits. The difference between what Medicare pays and what the provider charges is called a "gap." Almost from the outset of Medicare,  insurance products called "Medigap" policies were sold which pay the difference between what Medicare pays and what providers charge. Many seniors still use those policies, although the premiums have continued to rise in addition to the Part B premium charged by Medicare. Medicare Advantage outsources Medicare completely to the private sector with the curious idea that by spending more tax money taxpayers can inspire that sector to work harder to reduce the amounts being subsidized.) 

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I have identified three pernicious examples of misinformation that are confusing the public debate regarding health care reform.
All three are not only boring, they require an ability to discern the meanings of words in a manner that escapes experts, lay people, political activists on all sides and even journalists who are supposed to be careful about details of language. 

1. Professional compensation is not the same as profits. Health care is not furnished by insurance companies.


2. Health care is furnished by medical professionals, not insurance companies.  The mission of insurance is to manage risks.


3. Medicare Advantage, a private, for-profit insurance product, is not Medicare. Medicare is government-managed and private insurance is not. 

Medicare Advantage and Medicare are both paid for by tax dollars, but in the same way that commercial banks cost more for student loans than direct loans from the government, private insurance plans cost more tax dollars than public plans.