Beware of Managed Care

By Alec Pruchnicki, MD

As someone who is enrolled in Medicare, I know that this is the time of the year when we are swamped with ads about picking coverage plans. One major form of coverage for Medicare recipients is Medicare Managed Care and the other is traditional, or straight, Medicare. They share the Medicare model in about a 50/50 ratio.

One of the basic problems of Medicare is that it doesn’t cover everything. Eighty percent of major costs are covered but the other 20 percent is paid by the patients unless they have “Medigap” aka Part B coverage which they usually pay themselves. Additional insurance is also needed to cover gaps in medical equipment (glasses, hearing aids, walkers, etc), dental, medications and sometimes long-term care (nursing homes and some assisted living facilities). Managed Care coverage simplifies all of this and the patient enrolls in Medicare Part C for free and it covers all these gaps in traditional Medicare.

This can save a person thousands of dollars a year in personal expenses and so appears to be a magnificent option. But I advise my patients, who are all enrolled in Medicare, that managed care is great if you are healthy and expect to stay that way for the rest of your life. If something looks too good to be true, it usually is too good to be true. The problems start to appear when you get sick. Although most managed care organizations claim that they will approve payments to any doctor or hospital that accepts Medicare, that doesn’t mean that the doctors and hospitals will accept the low payments some of these plans pay. I have had patients who switched into Managed Care and found that physicians they had seen for years would not accept the often-low payments from managed care plans. In some areas, like rehabilitation, the number of sessions is more limited than traditional Medicare and often the therapy groups won’t accept the low payments.

I have an unusual medical practice in that 90 percent of my patients have Part B coverage by New York State Medicaid, the so-called “Dual Eligibles.” Medicaid is also often a low payer and some physicians won’t accept that coverage but I have found that it is usually much more acceptable than the private plans. The 10 percent that don’t have Medicaid either pay out of pocket for the additional services listed above or enroll in Managed Care.

One of the results of managed care problems is that as patients get older and sicker and have more medical needs, they want to have a wider choice of providers (doctors, nurse practitioners, specialists, etc.) than are willing to accept managed care payments. At that point many of the sickest patients leave managed care and re-enroll in traditional Medicare and accept the additional costs or get Medicaid assistance. In New York State this usually goes smoothly but there are states where managed care organizations make it difficult for patients to leave because the local Medigap policies have many gaps in coverage. The patient is sometimes trapped.

In my own case, I spend thousands of dollars a year to stay in traditional Medicare which is the most widely accepted medical insurance in the country by a wide margin. I must pay extra for Medigap, dental, vision, medications, and someday, maybe long-term care.

This is one of the many reasons that I and many other physicians would like to see a single payer system, sometimes described as Improved Medicare for All. On a federal level it would cover all the above-mentioned needs and pay for it out of Medicare taxes, as it does now. Virtually all these private plans would disappear and coverage would be extensive and permanent. In New York State, the New York Health Act is structured similarly but it has yet to be signed into law.

The deadline for changing Medicare coverage is December 7, although a similar option will be available at the end of next year. If you are switching plans, be careful, read the details, and see if you can afford to maximize your flexibility by paying out of pocket for traditional Medicare and all the other coverage. Good luck.