There will be no more opportunities to sign up for a Medicare health plan after December 7th. If you’re in the market for one, consider the following buying advice.
Once again, sign-ups are being accepted. About 65 million Americans will be asking themselves the issue of which Medicare option will provide the best health coverage between now and December 7th. As if that weren’t enough, we’re also bombarded with reminders in the form of TV and radio advertising, email promotions, SMS, and mailers, none of which are really helpful in terms of clarity.
According to Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation and co-author of a recent literature review comparing Medicare Advantage and regular Medicare, “it’s a really serious decision, and the most essential thing is to be informed.”
Here are some things to think about if you or a loved one are facing this choice.
- Quickly skip to the section on the motivation behind all the advertising.
- Medicare Advantage or Original Medicare?
- Please explain the drawbacks of Medicare Advantage.
- I guess I’ll have to stick with the original Medicare then.
- How much do you know about drug plans?
- Can I change plans if I decide I don’t like the one I initially chose?
- I need some guidance on where to look for it, please.
Why the marketing barrage?
Since 1965, the federal government has provided funding for Medicare, a national health insurance program. Since then, more and more options for Medicare Advantage coverage have been accessible. The Kaiser Family Foundation has predicted that in 2023, the typical beneficiary will have 43 Advantage plans from which to pick.
Similar to standard Medicare, Medicare Advantage plans are paid for by the federal government but are provided by private insurance firms in exchange for a flat monthly premium. The goal is to keep prices down by enabling insurers to keep a portion of the federal payment as profit if they can offer care at a lower cost than standard Medicare.
Humana and United Healthcare are the two most popular Advantage plan providers, and they and their competitors use heavy marketing to sign up and keep Advantage members. Some of these Advantage plan activities are dishonest, according to a new study from the United States Senate. For instance, some marketing organizations have sent Medicare recipients mailers designed to seem like government websites or letters. Many seniors have been thrown off by this, prompting Medicare officials to pledge stricter enforcement.
However, advertising has proven fruitful for the insurance industry. There is now 48 percent of Medicare recipients who are enrolled in a Medicare Advantage plan. It’s expected that by next year, most recipients will have opted into Advantage instead of traditional Medicare.
Which is better: Medicare or Medicare Advantage?
If you don’t choose carefully, your health and bank account could take a major hit. Each choice comes with its own set of advantages and disadvantages.
Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation, contributed to the study by writing a literature review comparing and contrasting Medicare Advantage with the traditional Medicare system. Importantly, “Both Medicare Advantage and conventional Medicare beneficiaries reported that they were satisfied with their care,” was cited by Dr. Biniek as a resounding finding.
Benefit-rich health insurance plans are straightforward to use. Then she said, “It’s a one-stop store.” Supplemental insurance, often known as Medigap policies, is often purchased by those with original Medicare to fill in the coverage gaps left by that program.
The lack of a monthly charge for some Medicare Advantage plans gives them the appearance of being more cost-effective than original Medicare. Similar to traditional Medicare, Advantage plans cap your out-of-pocket costs. Covered in-network treatments and supplies such as doctor visits and medications will cost you no more than $8,300 in 2019, and if your plan permits you to see out-of-network providers who charge more, you won’t spend more than $12,450.
But only approximately a third of Advantage plans (also known as P.P.O.s or preferred provider organizations) offer this to their members. An associate director at the Center for Medicare Advocacy named David Lipschutz stated, “most plans operate like an H.M.O. – you can only go to contracted providers.”
Please explain the drawbacks of Medicare Advantage.
One major drawback of these policies is that they often necessitate “prior permission,” or advance approval, for numerous treatments, medications, and healthcare providers.
According to David Lipschutz, associate director of the Center for Medicare Advocacy, “your doctor or the institution advises that you need additional care” (in a hospital or nursing home, for example), but “the plan says, ‘No, five days, or a week, two weeks, is acceptable.'” When that happens, you either have to go without treatment or come up with the money yourself.
According to a 2018 assessment by the Department of Health and Human Services Office of Inspector General, 75 percent of appeals from Advantage participants who have been denied care are successful. Mr. Lipschutz noted that many participants likely aren’t getting the care they need because only about 1 percent of beneficiaries or providers submit appeals.
Thirteen percent of services denied by Advantage plans matched Medicare coverage standards and would have been allowed under traditional Medicare, according to a report published this spring by the inspector general’s office.
If you frequently travel or spend a significant portion of the year away from home, an Advantage plan may potentially provide difficulties. It’s possible that if you’re from Philadelphia and fall sick in Florida while on vacation, your home city’s doctors won’t accept your insurance. Find out how these events are handled by the plan you’re currently using or thinking about switching to.
So maybe I should just go with traditional Medicare?
The lack of networks is conventional Medicare’s biggest benefit, according to Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation. Since the vast majority of medical professionals now accept Medicare, you are free to see any doctor or healthcare facility of your choosing. Patients with traditional Medicare rarely face the hassles of prior authorization.
However, standard Medicare does not impose any limits on out-of-pocket costs, and a 20% co-pay for hospital stays or pricey diagnostic tests and procedures can soon pile up. Most recipients, therefore, rely on Medigap policies or other forms of supplemental insurance, such as those offered by their employers or Medicaid, to cover these costs. Premiums for Medigap plans can range from $150 to $200 per month, according to a survey by the Kaiser Family Foundation.
According to the Kaiser literature review, people with traditional Medicare had fewer cost problems than those with Advantage if they had supplemental Medigap policies, but those without such policies were more likely to report problems such as postponing care due to financial concerns and having trouble paying medical bills.
The quality of hospitals and nursing homes that are covered under Traditional Medicare is also slightly higher. For many years, David Meyers and his colleagues at Brown University’s School of Public Health have monitored the disparities between traditional Medicare and Medicare Advantage utilizing data from millions of participants.
They found that compared to similarly situated patients in the same counties or ZIP codes, Advantage beneficiaries are 10% less likely to use the highest quality hospitals, 4-8% less likely to be admitted to the highest quality nursing homes, and 50% less likely to use the highest rated cancer centers for complex cancer surgeries.
What should I know about drug plans?
Traditional Medicare does not cover prescription drugs as Medicare Advantage plans do. You’ll need to enroll in a separate Part D plan for that.
According to Juliette Cubanski, the deputy director of the program on Medicare policy at the Kaiser Family Foundation, for 2023, consumers will typically have a choice between 24 individual Part D plans with monthly premiums ranging from $6 to $111, with the average coverage costing $43.
Dr. Cubanski suggests enrolling in the plan with the lowest premium if you don’t take many drugs or utilize generics. The most crucial factor, however, is whether or not the prescriptions you use, especially the most expensive ones, are covered by the plan, especially if you take several medications.
How much you end up paying for prescription drugs depends on both the plan you have and the drug, which might change from year to year. To add more confusion, some plans have “preferred” pharmacies, meaning that you may pay more at CVS than at Walmart for the identical drug.
What exactly is the procedure for Medicare Part D? In the first place, in 2023 the average deductible for standalone plans will be $505. That’s how much cash you have to put down before insurance kicks in.
After I pick a plan, can I switch if I don’t like it?
Yes, but tread carefully.
The process of changing Medicare Advantage plans is straightforward. On the other hand, if you decide to transfer from the original Medicare to an Advantage plan, you may run into serious complications. If you previously held a Medigap policy, you must cancel it. Then, you may not be able to replace that coverage if you subsequently become unsatisfied with Advantage and wish to switch back to conventional Medicare. Pre-existing conditions are just one of the reasons why Medigap insurers could reject your application or charge you a high premium.
(With a few notable exceptions. If you decide to go back to regular Medicare within a year after enrolling in an Advantage plan, you will be able to repurchase your previous Medigap coverage or enroll in a new one.
Medicare Advantage is not a “two-way street,” as David Lipschutz, associate director of the Center for Medicare Advocacy, has noted, yet many people assume it is. Unless you live in one of the four states (New York, Massachusetts, Connecticut, or Maine) that guarantees Medigap coverage at established pricing, “it’s one sort of insurance that might discriminate against you based on your health,” he said.
Very few people look around and change insurance providers. Consumers haven’t benefited much from the dozens of lawsuits filed against Medicare Advantage insurers for allegedly boosting their earnings through illegal means.
Recent research by the Kaiser Family Foundation found that only one-third of Medicare recipients in 2020 shopped around for better coverage. Even fewer beneficiaries switched plans, which may indicate consumer contentment or the difficulty of weighing the benefits and drawbacks of each option.
Where can I find help with these decisions?
You can enter the medications you use into the Medicare Part D plan finder on Medicare.gov to determine which plan offers the most comprehensive and cost-effective coverage. If you prefer to call from your phone, the toll-free number 1-800-MEDICARE is there to help you.
However, the State Health Insurance Assistance Programs, which are supported by federal funding and staffed by qualified volunteers, maybe the best option for people who need assistance evaluating their Medicare and prescription drug coverage options.
According to David Lipschutz, associate director of the Center for Medicare Advocacy, these initiatives “are unbiased and don’t have a pecuniary stake in your decision making.” However, at this time of year, their schedules fill up rapidly, and the yearly open enrollment period concludes on December 7th. Make haste.
