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Free Perks With Medicare Advantage Plans Aren't Really Free

"This is a program that more than 11 million seniors currently rely on, and seniors have expressed very high satisfaction with this program and want to be able to keep the coverage," said AHIP communications director Robert Zirkelbach. "Seniors are going to be shocked when they find out what these cuts are going to mean."

As Congress inches toward a final debate, millions of Medicare Advantage beneficiaries such as those here in Tucson are factoring heavily in the political calculus for lawmakers who want to cut spending without alienating this powerful constituency.

Their anxieties are leading to regional alliances among Democratic senators, such as Florida's Bill Nelson and New York's Charles E. Schumer, and GOP senators, including Arizona's Jon Kyl, whose states are home to disproportionately high numbers of Medicare Advantage beneficiaries.

Federal subsidies to Medicare Advantage insurers vary based on location. In Arizona, insurers stand to lose between $35 and $57 in monthly subsidies per beneficiary under the bills in Congress, according to AHIP.

Nationally, about 25 percent of Medicare beneficiaries have Medicare Advantage policies. But in Arizona, that figure is about 32 percent, and in Tucson it's nearly 40 percent, which explains why Kyl has been so outspoken.

"Seniors like the choices they now have, and they don't deserve to have them ripped away to help pay for this bill," Kyl, a member of the Senate Finance Committee, said Tuesday before voting against the panel's bill.

"It's going to be one of the biggest factors in the debate because seniors are a political force in this country," Kyl said in an interview. "The argument we're going to make is, 'That's not right, that's not fair to take these benefits away from seniors.' "

Smyth, a life coach who visits the Tucson Jewish Community Center several times a week for cardio workouts and yoga classes, said she supports health-care reform but does not want Medicare Advantage subsidies to decrease. "Where are they going to cut back?" Smyth asked. "I'm worried they'll cut Silver Sneakers."

In Tucson, many Medicare Advantage policies have no premiums, while some beneficiaries pay relatively small monthly fees to get added benefits such as dental care. But many pay fees for each doctor's visit, on top of co-payments as high as 20 percent of costs.

Many seniors said they were drawn to the plans because they were relatively healthy and visit hospitals rarely, and because their premiums would be substantially higher if they bought full-coverage supplements to traditional Medicare.

"The appeal is cost, obviously," said Norman Powers, 72, a retired electrical engineer, who signed up with his wife, Carole. He said they have not had any costly medical operations -- and then knocked on a wooden table. The gym membership that Health Net gave away has been a plus, he said.

"We do the full workout, treadmill, the works," Powers boasted. "And it's all free. We were paying $600 a year for our gym membership before."

With the annual Medicare enrollment period a few weeks away, Humana and other HMOs have hired new insurance agents in the Tucson area to hawk private plans to the swelling senior population, said Denise Early, an independent insurance agent. About 57,000 people here are on Medicare Advantage, and Pima County data show there were 58 policies on the market this year.

"The bottom line is, if you are living on $1,500 a month, and you're paying rent and have a car and groceries and other expenses, then Medicare Advantage with zero premium is attractive," said Lydia Baker of the Pima Council on Aging.

But Medicare Advantage policies can be frustrating, too. As with traditional managed-care programs, beneficiaries must consult through primary-care physicians in their insurers' networks, and the companies sometimes deny coverage. Bernie Keegan, 68, was hospitalized in March when he got sick and was throwing up blood. But his HMO did not cover some of his bloodwork or doctor's fees, leaving him with hundreds of dollars in medical bills.

"I'm kind of rolling over on my back here like a whipped dog," said Keegan, who directs a nonprofit organization. "I don't want to fight with insurance companies."

Keegan has a free gym membership. But he has yet to use it.

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