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  • Writer's pictureKen Connolly

Medicare Lies and Half-Truths: How Insurance Companies Deceive You

Updated: Jun 19

Key Points:

  • Medicare Advertisements Are Rife With Lies and Half-Truths That Deceive Enrollees

  • Many People Choose Plans Based On Freebies And Perks Instead of Medical Coverage

  • "Coverage" Within Medicare Plans Doesn't Mean Paid In Full




Medicare feels like the Wild West sometimes. You’re forced to endure an overwhelming amount of calls, letters, and commercials, and you often don’t know who to trust. Especially when many people marketing to you are loose with the truth.


We at NJ Life and Health have helped thousands of people with their Medicare, and we have seen people who were repeatedly deceived into taking Medicare plans they didn’t fully understand. These plans often don’t adequately cover their health needs and leave them with bills they couldn’t pay. In this video, we will provide real-world cases and examples of people who were misled so you can avoid these situations. Because once you’re in a Medicare plan you don’t like, it can be hard to get out before serious damage is done. Let’s dive into it.


Promising One Plan, Then Giving Another                                                                                  


Over the years, one of the most egregious examples we have seen is people who think they are signing up for a standalone insurance policy have their entire health insurance switched.

If you’re familiar with Medicare, you know about Medicare Advantage plans. These plans bundle services such as Dental, Prescriptions, OTC Cards, and more with your Hospital and Medical coverage. Many insurance companies and call centers will call prospective clients and advertise just one piece of a Medicare Advantage plan. They will say it is a dental plan or say it is a prescription plan. They won’t talk about hospital or medical coverage because they want to make it seem like they are giving you a standalone insurance policy for one specific need. The person on the other side of the line will think, “I do need a Dental policy. Sign me up.”. They don’t realize they aren’t getting just a standalone dental plan. They are switching their entire health insurance! In these cases, they are unknowingly moving out of a Medicare plan that best covers their medical needs for an added perk.


We have seen people sign up for a “dental plan” only to be moved out of Original Medicare with a Medicare Supplement, and they don’t find out for months. They only realize what has happened when they start seeing higher out-of-pocket costs for their medical expenses, or their doctor will no longer see them. We have also seen people in a Medicare Advantage plan that is great for their health needs inadvertently take a “dental plan” that switches them into a different Medicare Advantage plan. This new plan may not cover their doctors or prescriptions as well as the first one did, leading to higher costs and frustration.


How can you protect yourself?


Don’t make any impulsive decisions when it comes to your Medicare. Make sure you are fully aware of all the benefits you are receiving in a new policy and that you aren’t switching out of something that’s working for you to receive these new benefits.


Most importantly, you should work with a Medicare broker you can trust.


We at NJ Life and Health are an independent family-owned brokerage that has worked with thousands of people across 24 states. We have earned the trust of our clients and their friends and family, and we want to help you as well.


Contact us if you’d like someone in your corner who is honest and has your best interests in mind.


Cross-Selling


One of our biggest frustrations as an independent family-owned brokerage is when we work with clients to get them a Medicare plan that fits their health needs, and then the insurance company we sign them up with tries to cross-sell them additional or even different plans.


After all of our paperwork is in and the dust is settled, the insurance carrier will start sending letters and emails to our clients, posing questions such as:

“Are you interested in a Medicare plan that will pay for your groceries?”

“Do you want FREE Over-the-counter Items?”

“Do you want a $0 Drug Plan with Dental and Vision?”


This strategy is often implemented when people sign up for Stand-Alone Medicare Part D plans while on Original Medicare.


Take the example in which we have thoroughly and meticulously reviewed the health needs of a client, and together decided that Original Medicare with a Medicare Supplement and a Standalone Part D plan would be best. We fill out all the applications for the Part D plan, and the client is satisfied with their choice. The Part D insurance carrier then turns around and sends marketing materials like the ones we just mentioned to the enrollee to try to switch them into a Medicare Advantage plan.


The reason they do this is that Medicare Supplements and Standalone Part D plans, in most cases, are less profitable for insurance carriers. They would much prefer that you enroll in a Medicare Advantage plan because it makes them more money. They are willing to dangle freebies and perks in front of you to get you into Medicare Advantage.


Despite the fact that we have studied and fully assessed the client’s doctors, prescriptions, and more to ensure that they are covered the best they can be, one promise of free vitamins sometimes undoes it all.


Think about how crazy this is for a second.


We give a multi-billion dollar insurance company business, but it’s not good enough for them.  They still want more. They aren’t satisfied to just have you in their roster of enrollees. They want to make sure you are as profitable to them as possible; your health needs be damned. They may move you into a plan that may not be best for you. All the while pushing the independent broker you trust, and who researched the best plans for you out of the picture. And now you’re dealing with the insurance company on your own.


There is no free lunch when it comes to Medicare. If potential freebies like grocery and fitness benefits seem too good to be true, it’s very possible they are. Focus on your health needs first when comparing Medicare options.


This is health insurance, not grocery, gym, or bicycle insurance.  


BEWARE of Potentially Disadvantageous Cross-Selling in 2024


The many changes coming for Medicare in 2025 are prompting potentially increased attempts at often disadvantageous cross-selling this year.


Many insurance carriers will most likely pick up their pace of cross-selling and will try to take advantage of the coming changes and put people into plans that are more profitable to – guess who? -- the insurance companies. Be careful and be sure to have some informed and honest people in your corner.


We’ve put together a video and an article about these changes. You can watch the video here: (link), but we’ll also give you the cliff notes for it.


The federal government is putting a $2,000 Out-of-pocket max for Medicare Part D in 2025. While this is great news for people with high drug costs, many people with low drug costs may see their monthly premiums go up slightly. Your $0, $0.50, or $3 a month standalone Part D plan may go up to $20, $30, $40, or $50 per month.


We expect many insurance carriers to cross-sell people in these low-cost drug plans into new ones that will “keep your costs low.” They most likely won’t specify that they aren’t switching you into a new low-cost Standalone Part D drug plan, because they may be switching you to a low-cost Medicare Advantage plan with prescription drug coverage.


Coverage That Isn’t Full Coverage


We have clients contact us daily looking for benefits they see in Medicare advertisements. They want to talk about dental, grocery perks, and much more. Their interest is piqued by the promise of dental insurance that covers extractions, implants, and other expensive procedures. We then have to step in and manage their expectations because, in many cases, the “coverage” that those advertisements promote does not mean paid in full.  “Coverage” means partially paying your bills.


We at NJ Life and Health advise honestly and set expectations. We explain that we can set them up with a dental plan that HELPS to cover these costly dental procedures but that their out-of-pocket costs will most likely still be high.


In this dental coverage example, you can get a dental plan that covers implants. However, this dental insurance may only cover 10%-50% of the implants. The dental insurance company may also have a maximum yearly contribution within the policy. They may say, we’ll cover 50% of your bills up to $500, $1000, or $2000. Everything else is on you. If the cost of your implant is $5000, and your insurance company has a maximum contribution of $1000, you will still be stuck with a $4000 bill!


Yes, you had coverage. But the coverage didn’t do much.


This is just one of the half-truths of many Medicare Advantage advertisements that often leaves people with policies they don’t care for. They get lured in with a large promise, and then the fine print leaves them holding a policy that doesn’t do what they thought it was going to do.


Be careful of advertisements that offer big ancillary benefits. They may not be as good as they’re leading you to believe.


Leaving Out the Bad Stuff


When an insurance carrier or a Medicare call center tries to sell you a Medicare Advantage plan, they tend to start the conversation with the extra benefits we discussed in this video. Over-the-counter cards, dental, vision, and potentially grocery benefits lead the charge. The problem is that they often don’t discuss these plans' “bad” parts, such as the potentially high out-of-pocket medical costs. For instance, many Medicare Advantage plans in New Jersey have out-of-pocket maximums as high as $6000 to $10,000 a year. If something significant happens, like a cancer diagnosis, dialysis, or heart surgery, you could be on the hook for $10,000!


The omission of this fact isn’t a lie or a half-truth. It’s a willingness to leave out essential information from the Medicare conversation.


If someone is trying to have a Medicare conversation with you primarily focusing on extra benefits, flip the script on them. Ask them about hospital and medical coverage, if it covers your doctors, and about the out-of-pocket max. Things like this are much more critical compared to perks like over-the-counter cards. Your healthcare should always come first and always does when you work with NJ Life and Health.


Conclusion


Medicare Advantage plans often are more lucrative to the insurance carriers, so they will often pay brokers and agents higher commissions for selling them. This incentive has led bad actors across the entire Medicare industry to be loose with the truth when it comes to Medicare Advantage plans. They may not fully disclose what they are switching you to, cross-sell you into one of these plans after you’ve chosen Original Medicare, exaggerate the benefits, and purposely leave out discussions of medical coverage.

It’s essential to have a good actor in your corner.


NJ Life and Health is a family-owned and operated business that prides itself on honesty and transparency.


We always give our clients thorough explanations of their options and help them choose plans based on their health needs.

To schedule a no-cost Medicare education with one of our trusted brokers, reach out to us at www.njlifeandhealth.com or call our Toms River, NJ office at 848-226-6897.

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