Whose Advantage?

Among the health insurance options for emeriti and retirees offered by UC is a "Medicare Advantage" plan provided by United Healthcare.* Under Medicare Advantage, which now cover about 4 out of 10 Medicare recipients in the U.S., Medicare pays a risk-adjusted premium to the insurer. The insurer then is supposed to provide all Medicare-eligible services to covered individuals including administration. 

In contrast, under "traditional" Medicare, Medicare handles administration - including judging what services are eligible - and pays providers. Private wrap-around policies then supplement additional costs. In theory, however, Medicare Advantage is supposed to be identical to traditional Medicare-plus-wrap-around.

UC, as noted above, has offered Medicare Advantage in recent years as well as continuing traditional wrap-around options. The Medicare Advantage option, however, has been especially inexpensive to recipients - an obvious enticement. To this point, as far as yours truly knows, there have not been major complaints about how the Medicare Advantage plan operates in practice (as opposed to theory).

However, the item below offers a cautionary note on what can happen when private insurers handle administration and decide who is eligible for what:

From the NY Times: In the face of growing opposition from hospital and doctors groups, UnitedHealthcare said on Thursday it would delay a plan to stop paying for emergency room visits that it deemed nonurgent, at least until the pandemic has ended. The policy, which would affect millions of United’s customers, was greeted with longstanding worry over the unintended consequences of the coronavirus crisis on Americans’ health as people put off care for serious illnesses. The change had also sparked outrage in light of the steep declines in E.R. visits that ironically resulted in healthy profits and savings for insurers. 

Critics of United’s policy shift said it would exacerbate what experts said was a disconcerting pattern of people shunning emergency rooms in the last year or so, potentially contributing to heart attacks and other illnesses among those who not only feared contagion but also medical bills due to the economic fallout of layoffs and unemployment. Under the new policy, which was to go into effect next month, UnitedHealthcare, the giant insurer, had planned to scrutinize the medical records of its customers’ visits to emergency departments to determine if it should cover those hospital bills. But in the last week, several major hospital and doctors groups demanded that United abandon the policy...

Full story at https://www.nytimes.com/2021/06/10/health/united-health-insurance-emergency-care.html.

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*https://ucnet.universityofcalifornia.edu/compensation-and-benefits/health-plans/medical/medicare/uc-medicare-choice.html.