A Medicare Advantage scam.
Insurance brokers steer the unknowing and make a killing. Illinois retired teachers have little choice.
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Although I chose to enroll in the Medicare Advantage program that was offered to me through the Illinois Teacher Retirement System, I remain a critic of the growth of Medicare Advantage programs.
This may seem contradictory.
It is not.
My main concern with MA programs is that they are creating a private, for-profit market place that is gobbling up Medicare which was intended as a public socialized system much like Social Security.
As an Illinois teacher I paid into a fund that would partially subsidize my healthcare when I retired.
The catch is that in order to take advantage of the subsidy, I must use United Healthcare’s MA program.
If I want to use Original Medicare and use a broker to purchase Medicare supplements, I receive no part of the subsidy I paid into.
Mike Barrett, a retired Illinois teacher has been writing to me about the unfairness of this for years.
I personally have been satisfied with my Medicare Advantage coverage. But Mike feels differently and neither of us have a choice.
By the way, the Biden administration’s plan is to move everyone into a Medicare Advantage in the next ten years whether they want to or not.
Our retirement healthcare will then be privately managed by private insurance companies and they will make billions.
Here is something you may not be aware of.
If you are a retiree and go to an insurance broker for advice as to whether to use MA or Original Medicare, the broker is paid a huge commission to steer you to a MA policy.
I’m not providing a link. But here is what a company selling broker training promises potential brokers on their web site:
Is selling Medicare lucrative?
In short, yes. The average Medicare Advantage policy pays around $287 a year in commission if the purchase replaces an existing plan. However, you can get approximately double that — $573— if you write up a new Medicare Advantage plan for someone who hasn't had one before.
Assume for now that you primarily sell replacement policies and average $300 commission per policy. For example, if you sell 200 Medicare Advantage plans in your first year, you could earn $60,000 in Advantage commissions alone.
If you maintain that level in year two and retain 80% of your existing policyholders, your Advantage commission will increase to $100,000. That income will continue to grow annually, assuming you add new clients every year and hold on to a good percentage of your client base.
It's easier than you might think. An estimated 10,000 people turn 65 every day. By 2050, 22% of the U.S. population will be 65 or older — up from 16.9% in 2020. That's a lot of new customers.
Medicare Dive, a critic of the move to private Medicare Advantage, says this:
Why Congress would consider giving these corporate health insurers more business is hard to understand if our representatives are putting the interests of their constituents and the national treasury first. Yes, some Medicare Advantage plans are helping people who cannot afford supplemental coverage in traditional Medicare. But, the answer should be to strengthen and improve traditional Medicare, which is far more cost effective and allows people unfettered access to the care they want and need, not to hand more business to corporate health insurers who by at least one recent account are responsible for not meeting their members’ care needs, leading them to die.