As health insurers struggle with shifting government policies and considerable uncertainty, one market remains remarkably stable: Medicare Advantage plans.
Medicare Advantage is an alternative to traditional Medicare. Run by private insurance companies, the plans — mostly health maintenance organizations (HMOs) and preferred provider organizations (PPOs) — are expected to serve a record 20.4 million people next year, or slightly more than one-third of Medicare's 59 million members.
On average, seniors will have a choice of 21 plans, although at least 40 plans will be accessible in some counties and large metropolitan areas, Jacobson said. Availability tends to be far more restricted in rural locations.
While a few insurers are entering or exiting the Medicare Advantage market, most established players are remaining in place. Eight insurers dominate the market: UnitedHealthcare, Humana, Anthem, plans affiliated with Blue Cross and Blue Shield, Kaiser Permanente, Aetna, Cigna and WellCare. (Kaiser Health News is not affiliated with Kaiser Permanente.)
Despite Medicare Advantage plans’ increasing popularity, several features — including the costs that older adults face in these plans and the extent to which members’ choice of doctors and hospitals is restricted — remain poorly understood.
Here are some essential facts to consider:
The basics
Medicare Advantage plans must provide the same benefits offered through traditional Medicare (services from hospitals, physicians, home health care agencies, laboratories, medical equipment companies and rehabilitation facilities, among others). Nearly 90 percent of plans also supply drug coverage.
In 2018, 68 percent of plans offered will be HMOs, while 27 percent will be PPOs, Jacobson said. The remainder are small, specialized plans that are expected to have relatively few members. In general, HMOs require members to seek care from a specific network of hospital and doctors, while PPOs allow members to obtain care from providers outside the network, at a significantly higher cost.
Pros and cons
The Center for Medicare Advocacy, a nonprofit founded in 1986, recently summarized the pros and cons of Medicare Advantage plans. On the plus side, it cited:
●Little paperwork. (Plan members don’t have to submit claims, in most cases.)
●An emphasis on preventive care.
●Extra benefits, such as vision care, dental care and hearing exams, that aren’t offered under traditional Medicare.
●An all-in-one approach to coverage. (Notably, members typically don’t have to purchase supplemental Medigap coverage or a stand-alone drug plan.)
●Cost controls, including a cap on out-of-pocket costs for physician and hospital services (Medicare Part A and B benefits).
On the negative side, it cited:
●Access that is limited to hospitals and doctors within plan networks. (Traditional Medicare allows seniors to go to whichever doctor or hospital they want.)
●Rules that can erect barriers to accessing care (for example, getting approval from a primary-care doctor before seeing a specialist).
●Financial incentives to limit services. (Medicare Advantage plans receive a set per-member-per-month fee from the government and risk losing money if medical expenses exceed payments.)
●Limits on care that members can get when traveling. (Generally, only emergency care and urgent care is covered.)
●The potential for higher costs for specific services in some circumstances. (For instance, some plans charge more than traditional Medicare for a short hospital stay, home health care or medical equipment such as oxygen.)
●Lack of flexibility. Once someone enrolls in Medicare Advantage, they’re locked in for the year. There are two exceptions: a special disenrollment period from Jan. 1 to Feb. 14 (anyone who leaves during this time must go back to traditional Medicare) and a chance to make changes during open enrollment. (Shifting to a different plan or going back to traditional Medicare are options at this point).
Medigap implications
Choosing a Medicare Advantage plan has implications for the future as well as the present. For example, if someone enrolls in a Medicare Advantage plan when she first joins Medicare and stays with a plan for at least a year, she may not qualify for supplemental Medigap coverage if she joins traditional Medicare at a later date.
Medigap policies cover charges such as deductibles, co-insurance and co-payments that seniors with Medicare coverage are expected to pay out of pocket. People who join Medicare for the first time are guaranteed access to Medigap policies, no matter what their health status is, only for a limited time. Afterward, they can be denied coverage based on their health in most states.
Parsing costs
There’s a widespread perception that Medicare Advantage plans cost less than traditional Medicare. But actual costs depend on an individual’s circumstances and aren’t always easy to calculate.
Seniors often first consider what they’ll pay in monthly premiums. This year, the average monthly premium for Medicare Advantage plans is $30, almost $2 below last year’s. But nearly half of Medicare Advantage members are enrolled in plans that don’t charge a monthly premium — what are called zero-premium plans. (Seniors also need to pay Medicare Part B premiums, although some Medicare Advantage plans cover some or all of that charge.)
To get a full picture of plan costs, which can vary annually, seniors should look beyond premiums to drug expenses (including which drugs are covered by their plan, at what level and with what restrictions); deductibles (plans can charge deductibles for both medical services and drugs); what plans charge for hospital care (some have daily co-payments for the first week or so); and co-insurance rates for services such as home health care or skilled nursing care, experts said.
"It's really critical that folks dig deep and find out about all possible costs they may incur in a plan before they sign up for it," said Chris Reeg, director of Ohio's Senior Health Insurance Information Program. (Every state has a program of this kind; find one near you at shiptacenter.org.)
“Part of the equation has to be what you’ll have to pay if you need lots of care,” said David Lipschutz, senior policy attorney at the Center for Medicare Advocacy “In our experience, that’s often more than people expected.”
Information about Medicare Advantage plans' deductibles, co-payments and co-insurance rates as well as coverage details for medications can be found at Medicare's plan finder.
Finding a doctor
One way that Medicare Advantage plans try to control costs and coordinate care is by working with a limited group of physicians and hospitals. But reliable information about these networks is hard to find, and published directories often contain mistaken or out-of-date information.
“It’s not easy to determine who’s in-network for a Medicare Advantage plan,” said Fred Riccardi, director of client services at the Medicare Rights Center. “This information isn’t on Medicare’s website, and there’s no one, streamlined way to search for information about provider networks across plans.” His advice to consumers: Call all of your doctors to ask whether they’re participating in a plan you’re considering. (Make sure you have your plan number when you do, because a single company may offer multiple plans in your market.)
Making matters even more difficult: Plans can drop physicians or hospitals from their networks during the year, leaving members without access to trusted sources of care.
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