Seniors Forced to Give Up Retirement Benefits to Get Medicare

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Seniors might be forced to go without certain benefits when they’re on Medicare, depending on the state they live in, a new report found.

Historically, employers who offered health benefits to retirees typically only did so in a supplementary way, as an extra support for deductibles or coinsurance with added dental and vision coverage occasionally. But many companies now offer fuller coverage through Medicare Advantage.

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And some seniors are forced to give up access to traditional Medicare if they live in a state that has opted to only provide Medicare Advantage.

Medicare Advantage is the privatized version of traditional Medicare and can have several pros, namely lower out-of-pocket costs upfront and bonus coverage options like dental and vision or even gym memberships.

However, the dark side of some Medicare Advantage plans is that seniors often have to pick between a narrow selection of preapproved health care providers and sometimes struggle to get certain treatments authorized.

U.S. President Joe Biden at a White House event promoting lower health care costs. Seniors often face high out-of-pocket costs, even when on Medicare Advantage plans.
U.S. President Joe Biden at a White House event promoting lower health care costs. Seniors often face high out-of-pocket costs, even when on Medicare Advantage plans.
Win McNamee/Getty Images

In a significant number of states, seniors only had the option of Medicare Advantage, showed the report by KFF, the independent source for health policy research, polling, and news. In total, 12 states only provided retirees with Medicare Advantage instead of allowing them to choose between traditional Medicare and the privatized options.

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These are: Alabama, Arizona, Colorado, Connecticut, Georgia, Illinois, Kentucky, Maine, Missouri, New Hampshire, Pennsylvania and West Virginia.

In 2016, only eight states had this more limited option. And if you’re in these states, you aren’t necessarily spending less out of pocket, as only three of the Medicare Advantage-only states offered $0 premium plans.

Meanwhile 22 states and D.C. offered both Medicare and Medicare Advantage, and 14 states offered only options through traditional Medicare.

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Medicare Advantage may be chosen by states looking to reduce their overall health care costs. The state of Connecticut previously said it predicted it would save $400 million over the span of three years by changing its Medicare Advantage administrator, and New York City has also calculated similar savings of $600 million per year by switching to Medicare Advantage.

“The switch to it in many states has resulted in cost savings in the hundreds of millions of dollars,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

“However, for seniors, it’s more of a mixed bag. Medicare Advantage can offer lower premiums and be more comprehensive in terms of what it will cover. At the same point, it sometimes carries with it more limited options with the number of providers and, if a senior encounters the need to get services out-of-network, the rise in out-of-pocket expenses can be dramatic.”

Seniors have reported various problems with Medicare Advantage plans, granted some prefer the lower out-of-pocket costs initially. For seniors who have certain health ailments or need procedures done, many say they were forced to choose a provider they didn’t want or go out of network and pay substantially for their necessary, lifesaving services.

Medicare Advantage also typically relies on prior authorization, meaning many seniors are forced to wait to get specific procedures they need for their care, adding to the stress they already feel when getting treatment for a health condition.

“If you’re a senior and being shifted onto Medicare Advantage, be sure to read the fine print. If you’re going out-of-network often, you may want to invest in additional insurance options to shield yourself from sticker shock,” Beene said.

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

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