Replacement plans
present trade-offs and dilemmas.
NOVEMBER 23, 2018 — 9:25PM
PABLO MARTINEZ MONSIVAI - ASSOCIATED PRESS
The U.S. Medicare
Handbook is photographed Thursday, Nov. 8, 2018, in Washington. Seniors in many
states will be able to get additional services like help with chores, safety
devices and respite for caregivers next year through private ‘Medicare
Advantage’ insurance plans.
Many of the more than 300,000 Minnesotans who lose their
Medicare health plans next year are finding that options for replacement
coverage could require more or bigger co-payments when visiting a doctor.
The differences are particularly clear to consumers who
are losing their Medicare Cost plans while also being steered to Medicare
Advantage plans, which generally impose more fees for everything from ambulance
rides to X-rays.
Insurers say the higher co-payments in general are
balanced by lower monthly premiums with Advantage plans. Consumers can avoid
the complexity with co-payments by opting for original Medicare plus a Medigap
supplement, but they likely will find higher premiums as a result.
"There's always going to be trade-offs," said
Kelli Jo Greiner, health policy analyst with the Minnesota Board on Aging.
"This is what makes it so complicated."
The co-payment factor is one of many issues that
Minnesotans are confronting as they decide how to replace Medicare Cost plans
sold by the state's largest nonprofit health insurers.
A federal law is eliminating Cost plans across 66
counties in 2019, leaving consumers with a choice between original Medicare and
newer Medicare Advantage plans. Across the country, about two-thirds of
Medicare beneficiaries opt for original Medicare, while one-third opt for
Advantage plans that are sold by private health insurance companies.
State officials are worried that people losing Cost
plans will revert to original Medicare without buying Medigap and Part D
coverage. That could spell financial trouble for those who rack up big medical
bills, since original Medicare in many cases covers just 80 percent of medical
costs and doesn't cover most drugs.
There are several key differences between original
Medicare plus Medigap and Medicare Advantage coverage routes.
Original Medicare plus a supplement generally provides
broader access to doctors and hospitals. Medicare Supplements, which are called
Medigap plans, can be paired with Part D plans from any of more than two dozen
companies that sell drug coverage, whereas enrollees in Advantage plans are limited
to benefits offered by their medical insurer. The benefits with Medigap plans
are standardized, whereas Advantage plan details can change from year to year.
And Medigap plans don't use rules like "prior authorization" that
control costs but can frustrate patients.
Medicare Advantage plans, meanwhile, often sell for a
much lower monthly premium, including some zero-premium options. Low premiums
create a savings opportunity for people who don't use much care. Additionally,
the plans often include extra benefits that go beyond original Medicare, such
as coverage for preventive care and discounts on dental, vision and hearing
services. Some policymakers have promoted Advantage plans because they put
health insurance companies at financial risk while grading them on quality —
which they say provides incentives to efficiently manage care for quality.
Another difference is the co-payments, which can be
structured as a flat fee per service or as a percentage of the service's cost.
Medicare Advantage plans cap the total annual value of these out-of-pocket
costs at anywhere from $3,000 to $6,700 for in-network services (and more for
out-of-network care).
"That's part of the calculus," said David
Lipschutz, senior policy attorney with the Center for Medicare Advocacy.
"Do I want to pay more in monthly premium with more of an assurance that I
won't pay more when I incur health costs? Or, do I want to go with a lower
monthly premium knowing that if I do want to utilize health care services I
might be on the hook?"
Tommy Stiles, 72, of Henning opted to go the Medigap
route, even though the premium will be higher.
Stiles had been very satisfied with coverage from the
most comprehensive Medicare Cost plan from Blue Cross and Blue Shield of
Minnesota. Among other features, the plan asked him to pay $0 out-of-pocket for
ambulance rides, physician visits, outpatient surgeries and X-rays.
So, Stiles said he was alarmed this fall when Blue Cross
directed him to a Medicare Advantage plan that would force him to pay $5 to $20
for a physician visit, $50 per ambulance ride, $150 per outpatient surgery and
10 percent of X-ray costs. He's opted instead for a Medigap plan where the
premium is about 10 percent higher.
"There's no surprises," Stiles said of the
Medigap-style coverage.
Stiles is among the subset of Cost plan enrollees with
prescription benefits in their coverage, and therefore are eligible for a
process called "deeming" in which their current insurer automatically
enrolls them in a new Medicare Advantage plan. The federal government says
deeming can occur only if the total beneficiary cost with the new coverage
doesn't exceed the old health plan's average cost by more than $36 per member
per month.
Stiles is skeptical of the deeming process, because he
says it looks like Blue Cross was steering him to a plan where he might pay a
lot more in co-payments and coinsurance. For several years, Stiles has been
going to the Mayo Clinic for treatment of prostate cancer, and during the time
period he faced less than $5 in out-of-pocket costs.
The Advantage plan included a comparable premium and
slightly lower annual cap than the Cost plan in terms of out-of-pocket costs,
but it featured many more ways to incur those costs. "There's not room for
$3,000 or $4,000 surprises in my budget," Stiles said.
Blue Cross defended the deeming process, saying the
calculation factors not just co-payments but also premiums that often are lower
plus the value of extra benefits. The insurer says it recognizes Medigap might
be a better fit for some people, and encourages consumers to survey their
options.
"For some of these members that do have high costs
potentially tied back to them, it may be better for them to be in a Medigap
plan because that way you can more simply budget knowing you're going to pay a
premium, not potentially have out-of-pocket expenses," said Joel Stich,
senior director for government markets at Blue Cross.
Minnesotans who are losing Medicare Cost plans have a
one-time right to enroll in a Medigap policy without answering questions about
their health history, which could block enrollment at a later date.
At the Minnesota Board on Aging, officials say the deeming
process provides a public benefit by making sure consumers don't unwittingly
revert to Medicare without supplemental coverage, which can protect them from
huge medical bills. At the same time, the board encourages people to actively
evaluate whether the plan they've been deemed into is the best choice.
On the Medigap side, consumer advisers say finding the
best deal requires shopping among the many different insurers that sell
Medicare Supplement policies and studying differences with Part D prescription
drug plans.
The complexity of the decision facing so many Medicare
beneficiaries this fall explains why average wait times are up at the state's
Senior LinkAge Line, which provides free advice on Medicare options. The
average wait time this year is more than 21 minutes, compared with more than 8
minutes in 2017.
"People are not happy that they're having to make
these changes," said Greiner of the state's board on aging. "People
were really satisfied with what they had."
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