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.
Some folks may think that Friday’s Executive Order did away with Obamacare subsidies altogether. It didn’t.
There are two subsidies. One was cut. One wasn’t.
In a nutshell, one subsidy lowers the cost of premium (aka premium tax credits) for those qualified individuals and families enrolled through the exchange and making less than 400% above the poverty level. This stays in place.
The other covers a reduction in the out-of- pocket expenses or claims costs paid to the medical provider by the patient (aka cost-sharing reductions). This subsidy applies to those earning below 250% of the poverty level and covered by a plan issued by the insurance company through the exchange.
It’s this out-of-pocket budget appropriation that was cut by Friday’s Executive Order.
From what we hear, despite Friday’s Order most of those enrollees who qualify for the out-of-pocket assistance will continue to receive it as part of their coverage at least through 2018. Many of the insurance carriers still participating on the exchange expected the subsidy cut and planned for it when they filed their rate increases and established their pricing for 2018.
You can read more here.
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- Tom Barrett
- October 16, 2017
- ACA, affordable care act, cost, costs, employees, enrollment, exchange, federal, health plans, healthcare, healthcare reform, insurance, Obamacare, open enrollment, ruling, subsidies
- 0 Comments
Can’t tell you how many calls and emails we get from panic-stricken employees nearing that magic 65th birthday and Medicare eligibility. It happens a lot. A whole lot.
Some folks think if they don’t sign up three months before they turn 65 they’ll be in trouble. Others think the drop dead date to sign up is their birthday. And, many, many people think if they don’t enroll in Medicare by those dates they either won’t be eligible at all, or they’ll be penalized and get socked with much higher premiums.
Here’s the scoop:
THE MEDICARE INITIAL ENROLLMENT PERIOD IS 7 MONTHS LONG. IT INCLUDES YOUR BIRTHDAY MONTH, THE 3 MONTHS BEFORE AND THE 3 MONTHS AFTER.
Here are some basics, courtesy of Medicare Made Clear, that employees approaching their 65th birthday may want to know and save them from hitting the panic button:
1.) You Have a Set Time to Enroll in Medicare
Your Medicare Initial Enrollment Period (IEP) is 7 months long. It includes:
- The 3 months before the month you turn 65
- The month you turn 65
- The 3 months after the month you turn 65
Medicare Enrollment Date Calculator.
2.) You Can Delay Medicare Part B
Most people get Part A (hospital insurance) premium-free because they or a spouse worked and paid taxes. Part B (medical insurance) has a monthly premium.
You can delay signing up for Part B if you have other health care coverage like employer-sponsored health coverage. Having employer-sponsored health coverage gives you to the option to delay signing up for Part B, qualifies you for a Special Enrollment Period, and precludes you from getting hit with Late Enrollment Penalties if you elect to delay Part B.
3.) There Are Two Ways to Get Medicare
Medicare gives you two Medicare Coverage Options:
- Original Medicare (Parts A & B), the traditional way
- Medicare Advantage (Part C), an alternative to Original Medicare
Original Medicare is administered by the federal government. Medicare Advantage plans are offered by private insurance companies approved by Medicare. They must provide all the same benefits as Original Medicare Parts A and B. Many plans include additional benefits, such as prescription drug coverage and more.
4.) Medicare Doesn’t Cover Everything
Original Medicare doesn’t include coverage for prescription drugs. You may buy a standalone Prescription Drug Coverage (Part D) plan to get this coverage.
Some people also buy a Medicare Supplement Insurance (Medigap) plan to help with some costs not paid by Original Medicare.
Generally, you don’t need additional coverage if you choose a Medicare Advantage plan.
7 Months. That should make some breathe easier.
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- Tom Barrett
- February 17, 2017
- confusion, cost, costs, coverage, employees, enrollment, federal, healthcare, HHS, insurance, medical, medicare, open enrollment
- 0 Comments