If your answering machine, mailbox and email inbox have been filled with ads concerning Medicare’s open enrollment period, which ends Dec. 7, you’re in good company. Close to 65 million Americans are facing the annual task of picking their best health coverage.
It’s not as easy as throwing a dart at the board.
As Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation and a co-author of a recent literature review comparing Medicare Advantage and traditional Medicare, recently told The New York Times, “It’s a very consequential decision and the most important thing is to be informed.”
There’s a lot to unpack:
Medicare beneficiaries pay a monthly premium for the different “parts” of Medicare. Part A provides hospital care, Part B provides physician and outpatient care and Part D provides drug benefits. Patients with original (sometimes called traditional) Medicare may also purchase supplemental insurance, which is sometimes called “Medigap.” Part C insurance is a Medicare Advantage plan, which often includes parts A, B and D, according to Medicare.gov.
Traditional Medicare pays for services as they are needed.
Medicare Advantage plans are run by private insurers, with Humana and United Healthcare the biggest Medicare Advantage providers. In the Advantage plans, the federal government pays them a set amount for each person enrolled, then the insurer decides how to manage the care, though they have to cover the same things Medicare does. If they manage it well, they can keep any profit.
There are 43 Advantage plans, according to the Kaiser Family Foundation’s analysis of options. That number doesn’t count employer- or union-sponsored plans, which are not available to the general public. Most of the Medicare Advantage plans include some prescription drug coverage.
Enrollment between the two types of Medicare is close to even: 48% are in Medicare Advantage plans now.
While the differences between the two are real, Biniek said that most people are satisfied with their plan, whichever one they chose.
So many — sometimes confusing — options
But part of what makes it so tricky to decide is that there are so many options. While 40 counties in the U.S. have no Medicare Advantage plans, nearly 2,200 counties have at least 21 plans from which to choose. And close to 1,000 counties have between 1 and 20 plans, Kaiser reports.
Among Medicare Advantage plans, at least 97% offer some extra benefits, like vision, fitness, hearing, dental or telehealth, that are beyond what traditional Medicare allowed, Kaiser Family Foundation reported — “often for no additional premium, with the trade-off of more restrictive provider networks and greater use of cost management tools, such as prior authorization.”
Per The New York Times, “Medicare Advantage may appear cheaper, because many plans charge low or no monthly premiums” beyond the basic premium Medicare beneficiaries pay. “Unlike traditional Medicare, Advantage plans also cap out-of-pocket expenses. Next year, you’ll pay no more than $8,300 in in-network expenses, excluding drugs — or $12,450 with the kind of plan that permits you to also use out-of-network providers at higher costs.” Not all plans allow that.
The big downside, the article says, is preauthorization for some services, providers and medicines. If the plan says no, you pay it yourself or skip it. According to the Office of the Inspector General, about 75% of appeals succeed, but most people don’t appeal.
The report suggests that oversight of the plans that have extremely high overturn rates and/or low appeal rates should be monitored closely with an eye to corrective action. It also calls for tackling “inappropriate denials and insufficient denial letters in Medicare Advantage” and recommends providing “clear, easily accessible information about serious violations.” The Centers for Medicare & Medicaid Services agreed.
Experts also warn that it could be challenging to become ill while traveling. Network issues could arise if you need to seek care.
Traditional Medicare has challenges, too, including no set cap on out-of-pocket expenses. The 20% copay can be large.
Drug costs
A significant difference is in coverage of medication. Advantage plans tend to cover some drugs, on a formulary. With traditional Medicare, one needs to buy a Part D plan separately. The cost depends on how robust the list of covered drugs is — and whether your medications are on it.
Most of those plans have a deductible that has to be met before the drug coverage begins. You can consult Medicare’s online Part D plan finder or call 1-800-MEDICARE (1-800-633-4227) for help finding a plan that covers your medicine.
The government also funds State Health Insurance Assistance Programs to have trained volunteers help with Medicare and drug plans. The website notes the help is “trusted, unbiased and one-on-one,” because they don’t have a financial interest in which plan you choose.
But as The New York Times notes, open enrollment will soon end and they’re apt to be busy.
Bits of advice
The state programs website offers a “Welcome to Medicare Virtual Fair” through archived recordings and information, too, on signing up for Social Security.
Forbes recently ran advice from Forbes Health Advisory Board member Dr. John Bulger, board-certified internist and insurance expert, and Roger van Baaren, chief sales officer at Geisinger Health Plan, on picking the best coverage “without overcomplicating the process.”
They said the most confusing part is generally the number of plans. But the “information overload from television, digital, print and direct mail advertising” creates confusion, too.
They advise meeting with someone who represents local health plans or with a broker, though time is now getting short to do that. Ask first, they said, what plans that person represents. “You don’t want to meet with a broker who only can sell one or two plans because you might not get the best option for you,” they told Forbes.
Take a list of your prescription medications with you, they said.
They also note that spouses can choose different plans. And if you get a Medicare Advantage plan that doesn’t work for you, you can switch between Jan. 1 and March 31, though you cannot enroll in a plan for the first time during that period.