With more and more folks remaining in the workforce past age 65, we are often asked by clients to help explain Medicare eligibility and options to those employees on the cusp of turning 65. This article from Kaiser Health News (reprinted with permission) provides some really solid information about Medicare Advantage, including pros and cons, that’s worth sharing and bookmarking. Embedded in the article are numerous click-throughs to more information.
Medicare Vs. Medicare Advantage: How To Choose
As health insurers struggle with shifting government policies and considerable uncertainty, one market remains remarkably stable: Medicare Advantage plans.
That’s good news for seniors as they select coverage for the year ahead during Medicare’s annual open enrollment period (this year running from Oct. 15 to Dec. 7).
For 2018, 2,317 Medicare Advantage plans will be available across the country, “the most we’ve seen since 2009,” said Gretchen Jacobson, associate director of the Kaiser Family Foundation’s program on Medicare policy. (Kaiser Health News is an editorially independent program of the foundation.)
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, though in some counties and large metropolitan areas at least 40 plans will be accessible, 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 unaffiliated with Kaiser Permanente.)
Despite Medicare Advantage plans’ increasing popularity, several features — notably, 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:
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 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 standalone 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 is limited to hospitals and doctors within plan networks. (Traditional Medicare allows seniors to go to whichever doctor or hospital they want.)
Techniques to manage medical care that can erect barriers to accessing care (for example, getting prior 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 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. (Some plans charge more than traditional Medicare for a short hospital stay, home health care or medical equipment such as oxygen, for instance.)
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).
Choosing a Medicare Advantage plan has implications for the future as well as the present. Notably, 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 wants to join traditional Medicare at a later date.
Medigap policies cover charges such as deductibles, coinsurance and copayments 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.
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 members are enrolled in plans that don’t charge a monthly premium — so-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 copayments for the first week or so); and coinsurance rates for services such as home health care or skilled nursing care, experts said.
“It’s really critical that folks dip 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 https://www.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.”
Since 2011, Medicare Advantage plans have limited members’ annual out-of-pocket costs to no more than $6,700 — a form of financial protection. There is no similar limit in traditional Medicare. Yet, protection isn’t complete since out-of-pocket limits don’t apply to drug costs, which can be considerable. (In PPOs, a cap of $10,000 limits costs for services received from out-of-network providers as well.)
Plans have discretion in setting out-of-pocket limits. In 2018, 43 percent of plans will have out-of-pocket limits exceeding $6,000; 31 percent will set limits between $4,000 and $6,000; 20 percent will have limits between $3,000 and $4,000; and 6 percent will set limits beneath $3,000, according to a new Avalere Health analysis.
Information about Medicare Advantage plans’ deductibles, copayments and coinsurances rates for medical services as well as coverage details for the medications you’re taking 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 your doctors to ask if 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.
A new report discloses data about the size of Medicare Advantage plans’ physician networks for the first time. It finds that, on average, Medicare Advantage HMOs included 42 percent of physicians in a county in their networks while PPOs included 57 percent. Altogether, 35 percent of Medicare Advantage members are in plans with narrow physician networks, which tend to be the cheapest plans.
Although this data highlights the choices that seniors have with regard to physicians, it doesn’t speak to the wait time they may encounter in accessing care, Jacobson said, adding that, to her knowledge, this kind of information about Medicare Advantage plans is not publicly available.
KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.
We’re eager to hear from readers about questions you’d like answered, problems you’ve been having with your care and advice you need in dealing with the health care system. Visit khn.org/columnists to submit your requests or tips.
Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.
During several recent meetings this question was posed a number of times by curious employees and a few their employers. It seems many folks are still unclear about the exemptions. Many also were unclear on the amount of the penalties.
Below is a summary on exemptions and individual penatlies published recently in a Kaiser Health News article addressing these FAQs:
Who’s Exempt from the Requirement to Have Insurance?
The list of possible exemptions is a long one. You may be eligible for an exemption if:
• Your income is below the federal income tax filing threshold.
• The lowest priced available plan costs more than 8.05 percent of your income.
• Your income is less than 138 percent of the federal poverty level (about $16,105 for 2015 coverage for an individual) and your state did not expand Medicaid coverage to adults at this income level as permitted under the health law.
• You experienced one of several hardships, including eviction, bankruptcy or domestic violence.
• You are a member of an Indian tribe, health care sharing ministry or a religious group that objects to insurance.
• You are in jail.
• You are an immigrant who is not in the country legally.
Many also asked about the penalties. More from the KHN article:
Penalties: How Much?
For 2016, the penalty will be the greater of $695 or 2.5 percent of income.
Although much of the discussion is often about the flat dollar penalty – $325 in 2015 — many people will be paying substantially more than that. A single person earning more than $26,550 would not qualify for the $325 penalty ($26,550 – $10,300 = $16,250 x 2 percent = $325.) So the 2 percent penalty is the standard that will apply in most cases, say experts. For example, for a single person whose modified adjusted gross income is $35,000, the penalty would be $494 ($35,000 – $10,300 = $24,700 x 2 percent = $494. That same individual would have paid $249 in penalties for 2014.
The penalty is capped at the national average price for a bronze plan, which the IRS announced was $2,484 for an individual and $12,240 for a family of five or more in 2015.
To read about other ObamaCare FAQ’s go to FAQ: What Are The Penalties For Not Getting Insurance?
Read More >>>
- Tom Barrett
- March 18, 2016
- ACA, affordable, affordable care act, cost, costs, coverage, employees, federal, healthcare, healthcare reform, insurance, kaiser, loophole, mandate, Obamacare, penalties
- 0 Comments
We can all agree that our healthcare system is difficult to understand. Have you considered the confusion for people who have never had health insurance, or perhaps have not had it for a really long time? According to Drew Altman, president and CEO of the Kaiser Family Foundation, health insurance literacy is something that we as a society should work to improve. Here are some key points regarding the new insurance marketplace and ACA that Altman asks us to consider:
- 37% of enrollees don’t know the amount of their deductible
- only 46% of enrollees say they are getting a subsidy, when the official numbers indicate 85% are actually getting them
- many enrolled have no understanding of basic insurance terms like premium, deductible, copayment, coinsurance, maximum annual out-of-pocket spending, provider network, covered services, annual limits on services or excluded services
- people with lower incomes are less likely to understand the key elements of insurance (the people who need coverage the most understand it the least)
Altman also points out that people gaining new coverage are also expected to understand the intricacies of provider networks in the plans they choose, particularly if they have a health problem requiring specialty care. Otherwise, they’ll face high out-of-pocket costs when they visit out of network provider specialists. Understanding how drug coverage works is also important when dealing with tiers. Most of us understand that brand-name drugs cost much more than generics — but what about the folks who don’t know that? We all have a role to play to improve health insurance literacy. Unfortunately, as Altman points out in his article that appeared recently on WSJ’s Washington Wire, A Perilous Gap in Health Insurance Literacy, many of us get tested on our knowledge every time we access our health care plan.
Here are two info graphics that can help you get started with improving the health insurance literacy of the people you know:
We are the 90 by CommunicateHealth.com
The Facts about Health Literacy by Healthcare IT News