NC Health News - Marian Spicer, 72, was treated for a kidney stone at Duke Health in late October. During the procedure, the doctor accidentally tore her bladder, and she didn’t get out of the hospital until early November.
The pain of the experience was compounded by stress over the possibility of losing her insurance coverage.
Spicer was on a Medicare Advantage plan from UnitedHealthcare, a Medicare-approved insurance plan from a private company that administers Medicare benefits. UnitedHealthcare and Duke Health, where Spicer received treatment, were in the midst of a months long tussle over contract negotiations with a deadline of Nov. 1.
Worried she would lose coverage in the middle of the treatment, Spicer switched to a Humana plan that would start in November. She got out of the hospital Nov. 4.
“I didn’t know what to do,” she said. “That was the most stressed I’ve ever been — not knowing.”
UnitedHealthcare and Duke Health came to an agreement at the last minute, but it was too late for Spicer. Though she would have preferred to stay with her previous plan, she was now stuck with her Humana plan through the end of the year. She had liked not having to pay copays or premiums under the previous plan.
“I don’t understand why Duke and United Healthcare waited so long to decide what they were going to do,” she said.
Insurance companies and health care systems playing games of chicken over contract negotiations is common, but can be stressful for patients such as Spicer. It’s one of many factors — such as costs and risk — that can complicate the choice between Medicare Advantage plans and original Medicare for older adults. Original Medicare — administered by the federal government rather than private insurance companies — is accepted by far more providers, while Medicare Advantage can often be cheaper and add other perks, like dental coverage or gym membership.
Spicer could return to a UnitedHealthcare plan during the upcoming Medicare Advantage open enrollment period, which runs from Jan. 1 to March 31.
The open enrollment period for those on original Medicare ended Dec. 7, in which anyone with Medicare coverage could change their prescription drug coverage plan, as well as switch to a Medicare Advantage plan if they choose. If someone was already enrolled in a Medicare Advantage plan, they could switch to a different one during the time window.
Weighing the options
Medicare Advantage plans now cover more than half of North Carolinians on Medicare, the government-sponsored insurance for seniors and some people with disabilities. Instead of “traditional” Medicare, where the federal government pays for every beneficiary’s test, appointment or hospital stay on a piecemeal basis, the government pays private insurance companies to create Medicare Advantage plans, giving the insurers a set monthly amount for each patient to administer their care.
But no one plan will be right for everyone. Mari-Jo Hill, a counselor for the North Carolina Seniors’ Health Insurance Information Program in Wake County, said the decision should be made based on such factors as financial circumstances and lifestyle.
With original Medicare, enrollees need to buy a additional plan to cover their prescription drugs, often called Medicare Part D. In addition, Medicare only covers 80 percent of many physician services, even if you’re in the hospital, so many beneficiaries buy a standardized “Medigap policy,” sold by private insurance companies to help cover costs related to deductibles, copayments and coinsurance. Those policies often come with a premium that may be too costly for some.
It all can add up.
Enter Medicare Advantage, where insurance companies take those monthly per patient payments and bundle all of the different parts — prescription drugs, copays, premiums — into one easier to understand plan.
But Medicare Advantage plans have limitations too.
For instance, original Medicare is likely the better choice for people who travel frequently, as almost every health care provider accepts “traditional” Medicare, Hill said. Medicare Advantage plans, in contrast, have limited networks of doctors and hospitals. If a beneficiary gets sick far away from home, it can become costly.
Many people also don’t think about whether a rehabilitation facility, durable medical equipment provider or home health agency is in their network when they enroll in an Advantage plan, said Gina Upchurch, executive director of Durham-based Senior PharmAssist. Behavioral health providers are also less likely to contract with Advantage plans, she said.
Tricia Neuman is senior vice president of the health policy research and information organization KFF and is executive director of its Program on Medicare Policy. She said many people are in a different health situation when they first enroll into Medicare than later in life.
At 65, they may be drawn to extra benefits like free dental cleanings or a gym membership. But they may not be thinking about the possibility of needing to see a specialist in another part of the country, Neuman said.
“Often people kind of throw up their hands and say, ‘Well, I’m sure it’s going to be good enough,’” she said. “But as people grow older, that whole process may seem more daunting, particularly when people are sick.”
‘Pay as you go’
It’s possible to incur significant costs in a Medicare Advantage plan, but those costs are harder to see up front, Neuman said.
Advantage plans also require patients to “pay as you go,” Upchurch added.
“The sicker you are, the more you pay in these plans,” she said. The bills can pile up for services such as labs and radiology.
In original Medicare, the costs are more predictable, she said.
Medicare Advantage plans do have an out of pocket limit, but some are as high as $9,350 for in-network care in 2025. That can still be a lot of money for many seniors, Upchurch said. Original Medicare doesn’t have an out of pocket limit, but the supplemental policies usually cover enough of the costs that it isn’t as much of a worry, she said.
Either type of plan considers emergency care and most urgent care to be in network, no matter where you are, she said.
Affording original Medicare
Some people want to enroll in Medicare but can’t afford to pay for the supplement, said KFF’s Neuman.
“[KFF] did focus groups where people said I want to be able to stay with my doctor and I want to go see any specialist, but I can’t afford a supplemental policy to Medicare, and so I feel I have no choice but to go into a Medicare Advantage plan,” she said.
That supplemental insurance is also known as a Medigap policy. In North Carolina, there’s only one unencumbered chance to get that policy — the six months after a beneficiary first enrolls in Medicare Part B and/or were enrolled in Medicare before 65 years old and are now turning 65. After that time period is up, they may not be able to buy a policy or it may cost more. Insurance companies are also allowed to deny people for pre-existing health problems after that time.
Connecticut, Massachusetts and New York are the only states that require Medigap insurers to issue policies at any time during the year, regardless of medical history, according to KFF.
North Carolina is one of 12 states that only imposes the minimum federal standards on the plans. Twenty-nine states require Medigap insurers to issue policies when someone experiences a change in their retiree coverage.
If a North Carolinian enrolls in Medicare Advantage at first and later wants to switch back to original Medicare, they may not be able to get — or afford — a Medigap policy to cover all of the other costs associated with original Medicare.
One of the wins of the 2010 Affordable Care Act was preventing insurance companies from denying people coverage or charging them more based on pre-existing health conditions. But because Medigap rules were created a couple decades before the act, they’re not subject to that particular regulation, Neuman said.
It’s something many people don’t know about until it’s too late.
“I would be super shocked to hear if many people understood that,” she said.
