There are many types of Medicare mistakes consumers should to avoid. This article focuses on mistakes people make when researching Medicare supplement Insurance companies. If you are researching Medicare supplement plans and are trying to figure out which insurance company might be best, this article and video is for you
Mistakes People Make When Choosing Medicare Plans and Insurance Companies
As I started to construct how to go about researching Medicare supplement insurance companies, I thought over all the things I have seen people do. Because I have worked with and spoken to over ten thousand people about Medicare, I realized two things.
One is that what I want to share is simply too much information for one article or video. So, I have divided the subject into multiple videos and articles. This video is about the most common Medicare mistake I see on a regular basis. It is also the one Medicare mistakes that often results in people making a poor decision.
I am going to show you that mistake and then show you exactly what you should do instead.
A second video is on all the rest of How Not to Research a Medicare supplement insurance company. Most people waste a lot of time and energy on aspects of a company that just are not relevant to Medicare.
Please keep in mind, for my clients I do all of this for you. I have been in this finance and insurance industry since 1984 and have a background as a research analyst. I know these companies, their pricing habits, and strategies. When you speak with my office you are getting my recommendations.
You do not have to become a financial analyst or insurance broker. You just need one working for you. My services are free to you, the consumer. It cost you nothing to get the benefit of my knowledge and experience. That’s a win for both of us. We want to help you avoid the Medicare horror stories we have seen over the years.
Where It All Began
So, what is this one biggest mistake that is so important that I decided to make a separate video specifically on this subject?
Strangely enough it is a problem that started with a court case back in the 1990s.
Unlike the younger generation, many of us remember when public access to the internet was new. In the early 1990s the public internet was still getting its footing.
There was a company that decided to create a website to promote complaints about insurance companies. Its business model was to publish every bad comment they could find and then charge the insurance company to “clean it up”.
Of course, insurance companies sued to shut-down the website arguing it was nothing more than extortion. The courts, however, were very concerned about stifling free speech on the internet. They ruled that as long as the comments were real comments from real people, the website could continue to operate. Even if the comments or complaints were not relevant.
Fast forward to today, almost thirty years later and managing a social media internet presence is more important than ever for any company. But for the consumer, you, there are traps. There are websites that are designed to make it look like they are trying to do you a service when it’s not you they are trying to serve.
If It Is on The Internet, Does That Make It True?
When people Google insurance company ratings they often end up on this page or page like this.
Consumer Affairs. If your first impression was to think this is like Consumer Reports, that may be intentional, but it’s not correct. I will show you the difference in a moment.
The first thing to note is Consumer Affairs is a dot com website. “Com” for commercial business. But when you look there is nothing to buy and no advertisements. How does this dot com make money?
To their credit the answer to that question is now right here on the top of the front page. (This can change as design changes to this website have been relatively frequent) It didn’t use to be that way. In fact, when I first started with the idea of making a video about this, I had to dig deep into the site to find the truth.
It may be that more recent lawsuits like this have encouraged sites like this to be more upfront and change how they go about their business model.
But I am getting ahead of myself. Let’s take a quick look at the site business model and why that is important to you.
What is their business model? Let’s see how they make their money.
“We offer our website for free to consumers. We make money with our Authorized Partner Program. We have an authorized partner program for businesses who in turn pay us to participate. Those who participate are our “Authorized Partners.”
“We may earn money from certain businesses when you interact with them through our website (such as clicking a link on our website, filling out a form on our website, or calling a number on our website to connect with them) and/or when you make a purchase in connection with such interaction.”
Well, that is interesting. They are also an affiliate site where they get kickback on some products.
Who Benefits from This?
You may have already figured this out, but this site is not for the consumer. Its business model has nothing to do with benefiting the consumer. It generates income by convincing businesses to pay a fee to clean up “complaints”. The customer is the insurance company or corporation. Consumer complaints are just their tool to convince the company to pay a subscription fee so they can have a better online image.
Remember the lawsuit I mentioned from the 1990s? Well, there have been others.
The one I linked above is from Consumer Cellular in 2016. Consumer Cellular accuses them of intentionally subverting positive reviews for corporations that don’t pay their subscription fee. I will leave it up to you to read the lawsuit complaint and findings and appeals etc. I do not want to be accused of misquoting a legal finding.
But I do want to stress a few things that are critical in reference to your Medicare decisions.
First, even if all the comments on this site and others like it are true (which is questionable), that does not mean they are relevant.
Focus On What is Relevant?
If you are researching insurance companies to find out about the benefits or claims paying history of a Medicare supplement insurance company, you are missing the most important piece of the puzzle.
That piece of the puzzle is simply this; when you have a Medicare supplement plan, Medicare the government agency is your primary insurer. Medicare makes all the decisions on claims. The Medicare supplement insurance company has no say in what is covered, who gets paid, how much or when. Medicare dictates all of that. Medicare’s intent is to cover all medically necessary treatments. They rely on your doctor to help determine medical necessity.
In fact, your healthcare provider does not even bill your supplement company, they bill Medicare. Medicare then tells the insurance company what to pay, who, when and so on.
When you have Original Medicare, your benefit and claims experience is going to be the same no matter which insurance company you use. It doesn’t matter if you have the best or worst insurance company managing your supplement.
That is what makes Medicare supplement plans so attractive. The insurance company has no say in your healthcare. All they do is pay your provider.
The Internet is Full of … Traps
There are other sites whose business models and intent are similar to Consumer Affairs. Pissed off Consumer is one I have seen, and I am sure there are others. If you are going to use one of these sites for your research, caveat emptor.
You should compare what we just saw on Consumer Affairs with Consumer Reports. Consumer Reports is an actual not for profit organization that attempts to help the consumer make good product decisions.
When you can, go to Consumer Reports, then About Us, then Support Our Work.
Consumer Reports is funded by subscriptions and donations from Consumers. Not from the organizations they are supposedly rating. I hope the difference to you is self-evident.
Consumer Reports is a non-profit that serves the Consumer. Consumer Affairs is for profit company that profits off the consumer. Or, more precisely, uses the consumer to generate profits from corporations.
I am not suggesting you go to Consumer Reports to analyze an insurance company. I have a much better solution for you that I will illustrate in just a moment. But first I need to make one other brief point.
Medicare Star Ratings
Often, one of the first indications I have that someone has been searching through sites like Consumer Affairs or Pissed Off Consumer is how they express their tainted view of an insurance company. They respond to my recommendation by saying something like “That insurance company only has a one- or two-star rating. Why would you recommend it?”
First, Medicare is the only organization that can create legitimate Medicare Star Ratings. No other organizations’ Star ratings are considered valid and cannot be promoted or illustrated by a certified Medicare insurance agent.
Second. Medicare supplement plans do not have a Medicare Star Rating. Only Medicare Advantage Plans and Medicare Part D prescription drug plans have star ratings.
What Medicare Plans Are Eligible for Star Ratings
Why this is the case is the most important point you need to understand.
The reason the Medicare Advantage Plans and Part D plans have Medicare star ratings is because the insurance company managing these plans has a say in what is or is not covered.
Because the insurance company can have a say in your benefits, each consumer, can have an experience that is different than another person on the same plan. Medicare refers to consumers as a Medicare Beneficiary
You and your neighbor can have the exact same Medicare Advantage plan or Part D prescription drug plan and have a totally different experience. The insurance company may deny coverage for a procedure your neighbor needs, but not you. They may deny your appeal for a medication, but not your neighbor.
Why Medicare Has Star Ratings
The Medicare Star rating was created to provide you a way to measure the average performance of a Medicare Advantage or Part D plan.
This is what Medicare wrote regarding their Medicare Star Ratings:
“Introduction The Centers for Medicare & Medicaid Services (CMS) publishes the Medicare Part C and D Star Ratings each year to measure the quality of health and drug services received by beneficiaries enrolled in Medicare Advantage (MA) and Prescription Drug Plans (PDPs or Part D plans). The Star Ratings also reflect the experiences of beneficiaries and assist beneficiaries in finding the best plan for them. The Star Ratings support CMS’s efforts to put the patient first in all of our programs. … An important component of this effort is to provide Medicare beneficiaries and their family members with meaningful information about quality and cost to assist them in being informed and active health care consumers.
… Medicare Advantage with prescription drug coverage (MA-PD) contracts are rated on up to 45 unique quality and performance measures; MA-only contracts (without prescription drug coverage) are rated on up to 33 measures; and stand-alone PDP contracts are rated on up to 14 measures. Each year, CMS conducts a comprehensive review of the measures that make up the Star Ratings by assessing the reliability of the data, clinical recommendations, and feedback received from stakeholders. This expansion reflects CMS’s commitment to continue to ensure we are reflecting differences in performance, rather than differences in the populations being served across contracts.”
I wanted you to read the above as quoted to show you that Star ratings are not just an arbitrary complaint fest.
Why No Star Rating for A Supplement?
Now, let me answer the question that should be on your mind…Why is it that Medicare supplement plans do not have a star rating?
The answer: because the Medicare supplement insurance company has no say in your benefit coverage. Your experience with a Medicare supplement is your experience with Medicare Because that does not change from one plan or one insurance company to another, there is no need to create a measure of average performance. Medicare would be rating themselves and all supplement plans and insurance companies would have the same rating. It would be kind of silly for Medicare just to give itself a 5-star rating.
Another way to put it, if you and your neighbor both had Medicare supplement plans, even from different insurance companies, there would be no difference between your experience with Medicare and your neighbors.
National Association of Insurance Commissioners (NAIC)
So, for the last part of this article I want to show you where I would go to look up the complaint history of an insurance company.
Keep in mind, I still view it as a moot point when it comes to Medicare supplements, but it can be important for other types of policies and get an idea about the company itself.
Although Medicare itself and many insurance companies are national entities, insurance is managed by the state. Each state has an insurance commissioner whose office regulates insurance programs including licenses, prices, benefits and helps consumers with legitimate complaints.
With 50-sates there are 50 state insurance commissioners. To better share information they have created an association called the National Association of Insurance Commissioners. You can find them on the web at NAIC.org
Obviously, there is a lot on that site. If you are interested, I suggest reading the “About” section.
I suggest navigating to https://content.naic.org/cis_consumer_information.htm Where it says we can find information about insurance company complaints and so on.
This is where it gets a little tricky. If you want to search for a company, you must have the official name of the insurance company for that state.
For example; most of you may recognize United Healthcare as the company that is contracted with AARP. I believe they pay AARP 5% of revenues to use the AARP name. But AARP is not an insurance company.
When I plug in United Healthcare and Florida I get a legitimate result, but none of the complaints are logged. We get nothing. So, if you get no results, then you need to check the name.
United Healthcare is actually UnitedHealthcare Ins Co with NAIC Code 79413
You will find a similar issue with Blue Cross Blue Shield. Most people are totally unaware that BCBS is an association made up of 34 independent, unrelated companies. These companies simply pay the association for the right to use the BCBS name and logo so that they look larger than they are. https://www.bcbs.com/bcbs-companies-and-licensees
Anyway, the NAIC site can be a great resource for those of who like statistics. It is fun to play with. Keep in mind, in every case you look at the number of complaints or issues with a Medicare supplement are miniscule relative to the number of policies sold. And a complaint does not mean the insurance company did anything wrong. In fact, you can look at dispositions and find out how often the state insurance commissioner’s office upheld or overturned the insurance company position.
Medicare and the Cost of Cancer Treatment
One subject this article does not discuss is the increasing cost of cancer treatment. No matter what choice you make with your Medicare, the cost of treating cancer is likely to be very expensive. This linked article explains why and what you can do about it. Medicare and the Cost of Cancer Treatment
We Look Forward To Talking With You
But I want to stress this is not all you need and it’s certainly not all I look at when making a recommendation. There is much more required to make a sound decision. Still, if you are going to research all of this, at least use the right tool.
Again, that is what I do. I use over three decades of experience and training to help make a recommendation you can trust. My goal is to get you with a company that will provide a stable price experience. I do not like rice surprises and neither do my clients. I want to help you get with a company that will provide you the lowest price over your lifetime. That is my goal.