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Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.
The Centers for Medicare and Medicaid Services (CMS) appears to be accelerating its shift away from original Medicare in favor of the Medicare Advantage plans offered by private insurers. These private plans already are used by about a third of Medicare’s 60 million enrollees, and that number is expected to grow.
During this year’s Medicare enrollment period, which began Oct. 15 and will end soon on Dec. 7, CMS has regularly publicized the virtues of Medicare Advantage plans while saying nothing of substance about original Medicare. A recent New York Times article cited a CMS open enrollment email touting Medicare Advantage plans:
“You may be able to lower your our-of-pocket costs while getting extra benefits, like vision, hearing, dental, and prescription coverage,” the CMS email said. “In fact, 4 out of 5 people pay less than $50 per month for their Medicare Advantage Plan. This may be in addition to your Part B premium.
“With Medicare Advantage, you can pick from a variety of plans to get the benefits that matter most to you. And it’s a way for you to combine all of your Medicare health and drug coverage in a single plan.”
Seema Verma, the head of CMS, told The New York Times that the agency is “not steering any Medicare beneficiary anywhere.” Despite her denial, I really don’t know of any other conclusion to draw but that the agency is doing exactly that.
Adam Boehler, deputy CMS administrator and head of the agency’s Center for Medicare and Medicaid Innovation, said in a public appearance last week that one of the agency’s prime goals is to get rid of fee-for-service health care — shorthand for original Medicare under its current rules — in favor of value-based care.
Not surprisingly, Trump administration officials favor private sector Medicare providers. Their preference for Medicare Advantage plans is also strongly aligned with those plans’ abilities to manage the supply of health care, control costs and push toward value-based health care in favor of fee-for-service Medicare.
Many health experts agree with this goal but think original Medicare should be changed to support value-based care and not neglected in the push for Medicare Advantage plans.
Here’s a bit of background on how original Medicare and Medicare Advantage differ. (Readers who already understand the difference can skip down to the pros and cons.)
Original Medicare provides insurance for hospital and nursing home expenses (Part A) and for covered expenses of doctors, outpatient services, and durable medical equipment (Part B). It is a fee-for-service program where people can choose care from providers anywhere in the U.S. who accept Medicare. Claims are managed by private Medicare administrative contractors who oversee the program in different parts of the country.
Most of the roughly 40 million people with original Medicare also get Part D prescription drug plans from private insurance companies. Original Medicare has no limit on out-of-pocket expenses and Part B pays only 80 percent of covered expenses. About 10 million people with original Medicare buy private Medigap insurance plans that pay such uncovered expenses.
Medicare Advantage plans must cover everything that original Medicare covers but are also allowed to cover additional health needs such as dental and vision coverage. Many Medicare Advantage plans also cover health-club memberships and, beginning next year, will begin covering a range of non-medical health expenses. These will include transportation to medical appointments, at-home meals for people recently released from hospitals, and home-safety improvements such as bathroom grab bars.
Most plans include Part D drug coverage and have annual out-of-pocket spending limits, thus providing protection similar to Medigap plans. Enrollees thus can deal with one insurance company for all their Medicare claims, whereas they need to deal with separate companies for original Medicare, Part D drugs, and Medigap claims.
I’ve written in detail about how the Trump administration has provided a new class of Medicare benefits to Medicare Advantage plans but not to consumers using original Medicare. Also, this year’s series of Ask Phil columns about open enrollment included an extensive look at the pluses and minuses of Medicare Advantage plans.
Among the potential downside of Medicare Advantage plans is the requirement that customers use the services of doctors, hospitals, and other health providers included in a plan’s provider network. These networks usually allow plans to save money for themselves and consumers. But they also restrict consumer choice compared to original Medicare, which covers patients anywhere in the country as long as the provider accepts Medicare.
On the day after Thanksgiving – a slow news day favored by organizations releasing negative news – CMS issued its third annual report about inaccuracies in Medicare Advantage provider networks. As was the case with its earlier two reports, error rates were near 50 percent.
Many of the errors were minor in nature, but CMS reported that “inaccuracies with the highest likelihood of preventing access to care were found in 41.75 percent of all locations.” Error rates for phone numbers, addresses, and even participants in the directories is a yellow if not red light for consumers. Details on individual plan performance can be found by downloading this daunting spreadsheet.
As it has with prior reports, CMS sent notices to offending plans but has not otherwise made a big deal out of the problem. It should. Choosing a Medicare Advantage plan based on incomplete or even misleading information can be a life-changing mistake.
CMS has no automatic policy permitting people to switch plans if they are harmed by incorrect information in a provider directory. However, a spokesman said the agency will consider doing so on a “case by case” basic.
“If a beneficiary chose a plan based on its inaccurate provider directory information,” the spokesman said via email, “CMS may consider that to be a marketing misrepresentation, and allow the beneficiary to choose another plan.”
While there are only a few days left in this year’s enrollment period, new enrollment rules that take effect next year will allow anyone with a Medicare Advantage plan to change their minds anytime during the first three months of 2019. They can switch to a different plan or bow out of Medicare Advantage entirely and instead use original Medicare.
While this sounds like a costless do-over, that’s not necessarily the case regarding original Medicare. Anyone with Medicare for more than six months generally loses their guaranteed issue rights to private Medicaid supplement plans.
These state-regulated private insurance plans help pay for covered expenses that are not fully paid by original Medicare. Nearly all states permit insurers to charge higher Medigap rates to people who no longer have guaranteed access rights. (Here’s a Medigap primer.)
The bottom line here is “buyer beware.” Don’t make a Medicare Advantage enrollment decision based on what an insurance company’s provider directory is telling you. Call the offices of your preferred doctors and other providers and confirm the identities of their Medicare Advantage partners.
If you do want to change your Medicare Advantage plan and use original Medicare, use Medicare’s Medigap online policy search tool to identify attractive plans and then make sure to call them and find out what they would charge you. By comparing what you’re told with the policy search rates (which reflect guaranteed issue rights prices), you can get a good idea of how much more you’re being charged. (Here is Medicare’s useful guide to Medigap.)
Phil Moeller is the author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs” and the co-author of the updated edition of The New York Times bestseller “How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security,” with Making Sen$e’s Paul Solman and Larry Kotlikoff. On Twitter @PhilMoeller or via e-mail: email@example.com.