Twetch ·
Tell me more. Medicare Advantage is the $0 a month free state medical insurance for people 65+? They print money to keep it solvent?
Twetch ·
It's the government... Nothing is solvent but so lets not worry about that. Ok!?! We're here to talk about how Medicare Advantage goes brrrrrrrr.
Twetch ·
When you turn 65 you qualify for a government-sponsored insurance plan called Medicare. There are several parts to Medicare but we'll focus on Medicare Part C - The experimental private-public version of Medicare
Twetch ·
For a standard Medicare patient when you're seen by a provider that bill gets sent to a Medicare Intermediaries that pay the bill on behalf of Medicare. It's a little bit more technical but that's the gist...
Twetch ·
From Medicare's standpoint, you, on your own, are a ticking time bomb that may cost them $0/month or $♾️/month. There are some stops in place to slow that burn rate but doctors & hospitals are smart about extracting max value from Medicare.
Twetch ·
So Medicare said "Hey! Why don't we let private insurance deal with this sh#t? We'll pay insurance companies a fix fee every month to cover these patients."
Fix Monthly Fee to Insurance > Random "Fee For Service" Bills
Twetch ·
At first, private insurance companies weren't really interested in this as there's no cap on the risk. If you take on old, sick, patient and things go south your company goes bankrupt...
Twetch ·
So Medicare was like "Ok, fine, we'll give you more money if they have certain underlying conditions...Deal?!?! " And the Insurance companies accepted.
Twetch ·
In general, this is what it looks like. You sign up with an insurance plan and they try to figure out what is wrong with you. If they test and find you have a few issues/comorbidities then they get paid more per month to manage your health
Twetch ·
For example only these are not the actual payment rates:
0 comorbidity - $400/month
1 comorbidity - $600/month
2 comorbidity - $900/month
3 comorbidity - $1200+/ month
Twetch ·
Insurance companies started to realize that it was much more profitable to ID all your disease and help you manage those rather than just deny service.
Twetch ·
So how much is it worth?
Well, for Humana, Medicare Advantage generated $51 billion for 2020, while retail insurance was something like $4 billion
Brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Twetch ·
So when you hear something like "Medicare For All" what you're really going to see is "Medicare Advantage For All." You'll get a coupon from the government and the private insurance companies will fight it out to earn your business.
Twetch ·
Love it or hate it - it is what it is 🤷♂️