Better check the fine print on that newfangled Medicare plan
Many PFFS plans now have a marketing edge as well. Thanks to legislation at the end of last year, PFFS and other private managed-care plans that don't offer drug coverage can sign up seniors year-round during 2007 and 2008. Other Medicare plans are restricted to limited enrollment periods.
But as the Holts discovered, when it comes to health insurance, talk is cheap. A report released last month that examined the marketing of PFFS plans found that insurance companies frequently hire independent agents to peddle their plans. "It appears that many of the agents don't understand the products themselves, so some of the misconduct might be due to ignorance and some to outright fraud," says study coauthor David Lipschutz, a staff attorney for California Health Advocates, which conducted the study with the Medicare Rights Center in New York. CMS, which administers Medicare, is aware of the problematic sales tactics. "We're investigating claims even as we speak," says CMS spokesman Steve Hahn. "We take action and levy fines if plans are out of line."
Although the lack of networks makes the PFFS plans seem similar to original Medicare, many doctors and hospitals are wary of these plans and refuse to treat patients who sign up for them. What makes providers nervous is a novel setup in which any doctor who treats a patient enrolled in a PFFS plan may be "deemed" to be a participating provider and subject to the plan's contract terms. "The doctor has no idea what that contract says, and it's your patient, not you, that signed up with the plan," says James Rohack, a cardiologist in Temple, Texas, and a member of the board of the American Medical Association.
Despite the potential pitfalls, Medicare PFFS plans can be a good deal for some seniors. Pauline Phillips was paying $3,800 a year for a Medigap supplemental policy in addition to her regular Medicare coverage. The 79-year-old former sewing factory worker in Radford, Va., replaced her traditional Medicare plan with a Humana PFFS plan, which gave her broader coverage for the same $93.50 a month she was paying before. Even better, she was able to drop the Medigap policy. Phillips was diagnosed with breast cancer last year and has had two surgeries and 30 radiation treatments. She says she has no complaints with her coverage under the plan.
Unknowns. Consumer advocates say the plans can be a smart choice for seniors with relatively low incomes, as some cover more out-of-pocket costs than traditional Medicare. And seniors with multiple health problems may benefit from the disease-management component of some plans. "A problem throughout Medicare is the abysmal lack of coordination in people's care," says Robert Hayes, president of the Medicare Rights Center.
But before signing up, seniors should check with their doctors and other healthcare providers to make sure they'll accept the plan. The bottom line, say experts, is buyer beware. "There is some potential to offer savings to individuals, but there are a lot of unknowns about these plans, with little evidence as to how well they're working," says Tricia Neuman, director of the Medicare Policy Project for the Kaiser Family Foundation. Make sure that any new plan you consider will really cover all your health costs-diabetic supplies, a wheelchair, or physical therapy, for example-at a price you can afford. The last thing you want is to end up in a Medicare "take advantage" plan.