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Insurance naivete [1]

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Date: 2022-12-18

People under 66 have no doubt heard about Medicare Advantage. But, that’s not the only issue you need to be aware of.

My spouse was a retiree of a state university system with admittedly generous benefits, both before and after they retired. As a spouse, I was entitled to the same insurance benefits, for a very reasonable out-of-pocket premium.

Before I turned 66, we had the option of purchasing different levels of insurance. My spouse turned 66 first, but the issue didn’t arise until I also turned 66. I’ll talk about that in a moment.

There was a regular level of insurance, which I think may have been termed Bronze. We could also choose a Gold or Silver level, for a surprisingly reasonable increased premium. The insurance was through a company that is still ranked among the top five in terms of members, by numerous sources who rank insurance companies.

Once we turned 65, we were “moved” from our existing insurance private insurance coverage to Medicare Advantage. It wasn’t a choice. It wasn’t converted to a supplement. It wasn’t an option.

We were not anticipating that. We were informed that, because of our age, we were no longer covered by our previous insurance plan—neither of us.

So, in essence, my spouse’s employer took away that retirement benefit, with no compensation. It was an advantage to the employer: they no longer negotiated reduced premiums for this massive group of workers and retirees. Workers be damned.

Along with that, retirees had to change insurance providers, choosing only between UnitedHealthcare or Aetna, both of whom only offer Advantage plans, with lesser coverage than we had as non-retirees. Remember those Gold and Silver tiers? Those only apply to people under 65. They don’t exist once you turn the Magic Age, not even for a higher out-of-pocket premium. If you want greater health coverage, your only choice is to pursue that yourself, and pay a much higher premium, as just a person or a family, than if thousands of retirees were in your bargaining group.

Now, beginning in 2023, the only choice is Aetna’s Advantage Plan.

How did that happen?

The state university retirees have a voluntary annuitants association, and it includes multiple states. More than 14 states participate in this particular annuitants association. Of course, few employees really look at the warning on annuitants association’s website:

“It's important to learn as much about your retirement options as you can early in your career—and to join with other current employees and annuitants to help influence the direction of legislation.”

Legislation is the kicker there. It is obvious that the annuitants association is in collusion with Medicare Advantage, to dump the retirees on the state university system rolls. The association didn’t want to be responsible for administering really good insurance—not even their own. Even the basic insurance retirees once had was far better than the basic Medicare Advantage.

Joining the annuitants association is optional, and costs $94/ year for a member and spouse. For that fee, members become voting members on things like which insurer retirees can choose. But, it is a group vote. All, or none. Individuals do not get to choose. Everyone, in the group, votes and the winner, well, wins. The annuitants don’t win.

The sad thing is that a majority of fellow annuitants chose—chose and then offered—lesser coverage, with no option for a higher tier, for any amount of money. They have been sold out by their former co-workers, by a simple vote that a lot of annuitants probably didn’t even cast a vote on. In fact, these fellow annuitants made a decision to “influence the direction of legislation” and, if a retiree had not joined the association, they did not even have a say in the matter.

Remember, joining was optional and fee-based. Membership was not restricted to retirees. So, a decision about your insurance, in retirement, was decided by fellow state university workers who had the foresight to join early, pay their $94/yr—and VOTE. On your behalf.

After age 66, all retirees are now moved off the rolls and onto Medicare Advantage. End of story.

Secondly, the voting continues. Another vote was taken and now all these retirees from more than 14 state universities, and their spouses, are only allowed to have insurance through Aetna. Who knows what fellow annuitants will vote on, against our own best interest, next?

More Issues

When I was 58 years old, I began receiving disability insurance, because I was in cancer treatment, and unable to work. Suddenly, I received written notice that I was now covered by Medicare (regular Medicare, not Advantage). It turns out there are all kinds of age rules for Medicare. Until the law changes again, some people born in 1960 or later will not be eligible for Medicare until they are 67 years old.[1]

I was fortunate that, during most of treatment, I was still covered by our private insurance. My chemotherapy was covered along with my eight hospitals stays in six months. I paid very little out-of-pocket expenses for chemotherapy, prescription drugs for pain and nausea, PET scans, MRIs, and CTs. Losing our house was never even a concern. My spouse had those benefits for his years of service and our additional out-of-pocket premium amounts for the upper insurance tiers. Concerned friends and family asked if we were at risk of losing our home. Of course, not. We had an upper tier insurance.

Medicare Advantage doesn’t offer tiers. They have restrictions on how many times you are allowed to have certain tests, of if Medicare Advantage covers them at all.

After all, it is insurance. Insurance is risk assessment. Insurers bank, pun intended, on you not ever having to cash in on those premiums. They get to keep your money, if you stay healthy. Medicare Advantage, or otherwise, does not want to have to pay for anything. They—your government—wants to keep the money and subcontract to other people to sift through all the different ways they can avoid actually paying for healthcare.

A doctor once told me, only half in jest, that everyone gets cancer or cataracts, if we live long enough. It wasn’t necessarily a scientific fact. But, it is pretty close to the truth. I remember chemo patients begging staff to explain why they got cancer after a lifetime of healthy living and eating. It happens. It can happen to anyone.

Environment and diet impact health. We do know that. But, when a patient is diagnosed with cancer, one of the first tests is a DNA test. Cancer drugs are based on genetics and patients quickly learn DNA terms like BRCA genes.[2] A patient’s DNA determines the type of treatment most appropriate for their specific cancer. Invest all the money you want in insurance and live the healthiest possible lifestyle, and you could still develop cancer, at some point in your life.

Insurance doesn’t literally keep you healthy. They do encourage health, but it doesn’t protect you. So, it is supposed to be there for you when you need it.

Now? All these state university retirees are being deprived of not just insurance, but they are being deprived of a benefit they were entitled to in exchange for their years of work and they paid for spousal insurance. For what?

Have fun being young—but don’t forget you could lose everything including your life, if you don’t work hard at assuring your own insurance coverage.

Pay attention. Know who decides on your insurance provider. Plan a retirement insurance plan, and keep it current. Stay current on Medicare Advantage law, Join your annuitants association, union, or whatever applies to your situation. Vote. Vote. Vote.

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[1] Starting Your Retirement Benefits Early https://www.ssa.gov/benefits/retirement/planner/agereduction.html [2] BRCA Genes https://www.cancer.org/cancer/breast-cancer/treatment/targeted-therapy-for-breast-cancer.html

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