Free healthcare for seniors....in Florida!
The debate continues over Medicare Advantage and whether or not private Medicare plans are a good thing for seniors and/or Medicare. Plan information is now available on the Medicare.gov website where you can compare the details of plans offered in your state and county.
I decided to take a look at plans in Florida where Medicare pays insurance companies the highest amount for seniors enrolled in Medicare Advantage plans, and I was shocked to see that seniors in Florida are not facing the same cost increases as older citizens in Arizona. In fact, for seniors enrolled in most Medicare Advantage plans in Florida (HMO plans), their healthcare is practically free!
Let's look at plans offered by the same company, Humana, in both Arizona and Florida. I was shocked by the differences.
|
|
Humana Gold Plus HMO Pima County, Arizona |
Humana Gold Plus HMO Dade County, Florida |
|
Monthly premium |
$0 |
$0 |
|
Hospital stay |
$195/day, days 1-7, $0 days 8 + |
$0 (no limit to days in hospital) |
|
Doctor office visit |
$10 primary doctor, $35 specialist |
$0 |
|
Outpatient surgery |
$35 - $150 |
$0 - $50 |
|
Labs, x-rays, radiology |
$10 - $150 |
$0 - $50 |
|
Annual max-out-of-pocket |
$5,000 |
$3,400 |
|
Average Medicare payment per enrollee |
$797 per month |
$1,013 per month |
Senator Kyl of Arizona has been a vocal defender of Medicare Advantage plans, saying seniors in our state should not lose the benefits and choice offered through private Medicare plans. Senator Ben Nelson, a Democrat from Florida, added an amendment to the Senate Finance Committee Health Care bill that would protect added benefits in Medicare Advantage plans such as free gym memberships, dental and vision services.
Senator Kyl seems to be protecting choices for Arizona seniors that are mediocre at best, while Senator Nelson's constituents have the gold standard in healthcare plans.
My question is, "How and why are seniors in Florida getting practically-free healhcare while seniors in other states face rising costs and less coverage?" Never mind the free gym memberships. Why do Florida seniors pay nothing for hospital stays and doctor appointments?
Those are very good questions...rec'd for asking them.
October 17, 2009 12:44 PM | Reply | Permalink
The statement about "practically free healthcare" may be misleading. What does the $1013/month ($12,156 per year) refer to? How much do Florida seniors actually pay Medicare per year in premiums and what are their additional out of pocket expenses?
October 17, 2009 1:08 PM | Reply | Permalink
All seniors on Medicare pay their Part B premium which is $96.40 per month (except low-income seniors because their state will pay this for them - if they know about the Medicare Savings Program - and about 25% of poor seniors are not aware of this help).
Medicare pays the insurance company for each enrollee in their Medicare Advantage plan, and Florida has the highest payment rate in the country, by far ($1,013 on average).
I always thought the higher average payment was because healthcare in Florida is more expensive, but looking at what seniors in Florida DO NOT have to pay for, it seems clear there is a big giveaway there.
In Arizona, seniors living on $1300 per month face $2,000 in bills if they end up in the hospital (once). If they end up hospitalized again two months later for 10 days, they'll pay another $2,000 - unless they hit their annual max out-of-pocket (MOOP).
In Florida the cost to someone enrolled in the same type of HMO plan is $0. Everything in the hospital is covered: surgeons, nurses, food, bed, therapy, tests.
The list of benefits in my post shows that seniors in Medicare Advantage plans in Florida have very few out-of-pocket expenses, while seniors in Arizona pay for everything.
So I think "practically-free" is an accurate description as far as Florida seniors are concerned.
October 17, 2009 3:07 PM | Reply | Permalink
Thanks for the details. I'm still trying to put the numbers in context. Florida seniors, like seniors elsewhere, pay for Medicare via payroll taxes during their working years plus $96.40 monthly Medicare B premiums. If they join the Advantage program, they get extra benefits for almost no extra cost, but I assume part of this reflects the fact that they are joining an HMO rather than participating in fee for service Medicare. In turn Medicare (i.e., we the taxpayers) pays the private Advantage insurer $1013/month to pay providers for services.
This may be an excellent deal for the seniors, depending on the quality of the HMO care. It may also be an excellent deal for the private insurer, Humana, if it makes a decent profit from what Medicare pays it. As far as I can tell, Medicare Advantage programs nationwide exhibit a wide range of quality and efficiency - some appear to justify the federal subsidies, while others are simply wasting taxpayer money. I would be interested to know the figures for Humana's profit and overhead expenses. Theoretically, it might also be nice to speculate on what traditional Medicare could provide in the way of services at $96.40/month if they were based on the same type of HMO arrangement that Humana offers.
October 17, 2009 6:42 PM | Reply | Permalink
I wonder if it has anything to do with who was governor and who was president when this stuff didn't pass, then passed, Congress
October 17, 2009 6:10 PM | Reply | Permalink
Florida panders to seniors simply because senile old people with money are the only ones who would voluntarily move to this benighted state any more.
"It's a nice place to visit but I wouldn't want to live here. I know...I live here."
C
October 17, 2009 8:26 PM | Reply | Permalink
I never thought about Jeb Bush and GW Bush, but it does appear that Florida providers (hospitals, doctors, and other services) get higher Medicare payments in both Medicare Advantage and Original Medicare fee-for-service.
Humana says it's profit margin on Medicare Advantage plans is only one or two percent, but they also have marketing and administrative costs and multi-million dollar salaries at the top, which,if I recall correctly, comes to 14 or 15%. Medicare's overhead is around 3%. The math and all the zeroes are beyond me, but say Humana is paid on average $900 per month by Medicare for each enrollee. Humana has about 1.5 million people enrolled in their plans. I loose track of the zeroes when I try to come up with a revenue number. But it's big. And their 1-2% profit is also big.
Dade county has 81 Medicare Advantage plans. 61 are HMO's and not all of them are necessarily good. But I don't think any are terrible. Medicare has a rating mechanism based on customer feedback.
The problem here in Arizona is that co-pays for doctor visits and hospitalization are going up in all the Medicare Advantage plans, so it is difficult to recommend any particular plan as "the best". We're not supposed to use that term anyway, but now there really is no best plan. Florida, on the other hand, is incredible with so many plans that have so few co-pays. Plus they get dental and vision services...and that famouns free gym membership. I want to know why there is such a wide gap between plans in Arizona and plans in Florida.
October 17, 2009 8:36 PM | Reply | Permalink
The Florida bonanza may not last. If current reform proposals pass, and attempt to find ways to pay for them that include cuts in Medicare Advantage subsidies, some of the seniors may find they have to pay for their own gym memberships.
The gym memberships are an inviting target for ridicule, although in some cases, they may actually benefit the health of participants. The real problem with increasing federal subsidies to Medicare Advantage plans in recent years is that only a small fraction of the increase has actually gone into additional benefits for subscribers, while most appears to have gone into increased insurer administrative expenditures and perhaps a bit into extra profits as well.
October 17, 2009 9:33 PM | Reply | Permalink
Additionally, some of the subsidies to Advantage insurers appear to have gone into reducing copays and out of pocket expenses to subscribers, which is fine for the subscribers, and is a good sales tool, but which subtracts from the financial resources Medicare has at its disposal to provide benefits to traditional Medicare participants, who are three quarters of the premium-paying Medicare population.
October 17, 2009 9:47 PM | Reply | Permalink
I have learned that the "free gym memberships" actually cost about $2 per month for the Medicare Advantage plans. This is because Silver Sneakers, which manages the gym memberships and offers "senior aerobics" at the gyms, acts like an insurance policy for the insurance companies/medicare advantage plans.
Apparently the plans pay Silver Sneakers $2 per person enrolled in their plans. Because only 30-40% of enrollees take advantage of the gym membership, Silver Sneakers is able to negotiate deals with gyms, collect money from the Medicare Advantage plans, and make money by providing this service. The plans get an inexpensive marketing tool (free gym membership) and enrollees get a nice benefit - for a very small price. Sounds good to me.
October 17, 2009 10:44 PM | Reply | Permalink