Traditional Medicare vs. Medicare Advantage - Part 1

I would take Traditional Medicare over Medicare Advantage, if at all possible. I guess you are wondering why I would do this. Well, let me try to explain.

You must understand how Medicare Advantage was borne! President Bush signed into law Medicare Advantage (originally known as Medicare Choice in 1997). Adjustments were made to the program in 2003 to include the prescription drug benefit. Many conservatives were outraged and upset with the Republicans voting for this, but President Bush signed this into law knowing full well it would be a boondoggle for the private insurance companies.

Medicare Advantage, simply put, is your traditional Medicare given to private insurers to manage your care. So in other words, your traditional Medicare was privatized through Medicare Advantage. The cost of capitation per person under Medicare Advantage is 10% more than traditional Medicare in 2008, and costs approximately 14 billion in 2009. Reference: CMS.gov

For those who hate the ACA (Affordable Care Act-AKA Obamacare), check this out. In 2010, the ACA set its goal to par down the capitation back to what the cost of traditional Medicare was. Now I want you to pay attention. I previously said the total cost added to Medicare under the Medicare Advantage added 10% more to the government medical costs for this program, which equates to $1,000.00 more per person each year that the government has to pay. (Reference CMS.gov) Of note, as of this writing, there is some uncertainty on whether these changes will be implemented.

The added cost of a $1,000.00 per person each year has nothing to do with fraud or anything like that. This has, however, everything to do with paying private companies to do what the government was doing for 10% less. So we jump up and down and talk about the government, but it’s this privatization that is breaking our country. Greed is taking over here again. Now Obamacare is set to bring all of these costs back down, in theory. Time will tell. As of this writing, insurance companies and Fox News are complaining and attacking President Obama saying he is cutting your Medicare by not wanting to pay this additional 10% cost. Again, here is another reason for the insurance companies and money makers to hate Obamacare as it takes away from their profits.

Now, there is nothing wrong with Medicare Advantage. This works for a lot of seniors, especially those who are on many, many medications. However if you are not on a lot of medications, traditional Medicare may be better….I said may be better. Remember that, however, when you are railing against the government, but the government is paying for the extras on your Medicare Advantage Plan. Under Medicare Advantage, you may be getting that gym membership free…really free? Do you honestly believe anything is free? To be continued...