Sorry Virginia, but there is no Medicare Santa Claus
We’ve all seen the commercials – faded and forgotten football stars and actors, selling access to “cashback in your Social Security check” simply by giving a call to the number on your screen. And then being endlessly bombarded by unsolicited phone calls selling Medicare Advantage – “but I wanted the cash”.
I have had enough people ask me what this is all about that I would put out a blog and explain what is going on.
The Truth About Medicare Rebates
First, there is no access to Santa Claus via Medicare Advantage. Medicare Advantage plans must provide all the benefits provided by original Medicare, subject to maximum annual out-of-pocket costs ($7,550 in network for HMOs or $11,300 for PPOs in 2022), and normally include additional benefits including drugs, dental and hearing. There is virtually no limit to what they can offer – including flex cards for discretionary expenditures, access to non-traditional medical services, transportation, over-the-counter medications, and groceries.
In addition to these other benefits, some plans are offering rebates (I’ve seen them from $25-$100 per month) for Part B payments. And remember, for 2022 Medicare charges for Part B are $170.10 per person per month.
It is critical to understand that these Part B rebates are not special, and many plans that do not offer rebates offer cash equivalents in flex cards and other benefits that vastly exceed Part B rebates.
How Part B Rebates Work
There is no Santa Claus or free lunch with Medicare. If a plan offers a Part B rebate, that benefit needs to be evaluated against all the other costs and benefits of alternative plans. As an example, many of the plans that I have seen that include Part B rebates are designed for Veterans, who get their prescription drugs through the VA or other Veteran benefit. Because the Veterans do not need the drug benefit, they get a rebate of some of the cost – but it is not free. The benefit is being paid for somewhere else. And because they have a drug benefit, they are not exposed to future penalties.
How We Help Our Clients
We look at these Part B rebate plans for our clients who spend several months per year outside their home market and buy their drugs elsewhere – typically outside the US. Even this has a potential penalty in the future which must be carefully considered against total beneficiary cost and risk in the future. Because there is no free lunch.
As an example, we represent 29 different Part B plans here in Nashville, of which 4 have Part B rebates. We were busy this last selling season but did not find that these giveback plans were a good fit for any of our customers – when weighed against the needs of the client and the benefits of all the available plans.
The takeaway message here is this; Medicare Advantage plans can be great for certain clients, but any individual benefit of a plan must be considered against the medical needs of the beneficiary, the expected total cost of care in the benefit period, and the risks that the client should reasonably accept. Focusing on any single plan benefit is misleading at best and can cause real damage to beneficiaries.
Sorry, but there is no Medicare Santa.