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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 “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; and he will answer as many as he can.
Circle Oct. 15 on your calendar. That’s the first day of Medicare’s annual open enrollment period for 2019 coverage, and there likely will be eye-opening changes next year in private Medicare Advantage (MA) plans.
MA plans were authorized in their present form beginning in 2006. Since then, they have become very popular, and now account for roughly one-third of Medicare coverage. Original Medicare, which consists of Part A and Part B, accounts for the other two-thirds. Each approach to Medicare has its strengths and weaknesses, but the upcoming changes to MA plans have the potential to trigger an even larger shift away from original Medicare.
The 2018 spending bill recently passed by Congress authorized MA plans to expand coverage for items that original Medicare does not cover, most significantly including items that are not even medical in nature but are strongly related to improving patient health and well-being. Examples include groceries, transportation for medical care, the installation of home-safety equipment, and paying for home health aides to provide non-medical care.
Specific coverage changes must be approved by the Centers for Medicare & Medicaid Services (CMS), but the agency announced it will encourage them when it begins formally reviewing 2019 private plan coverage proposals in June. That doesn’t leave a lot of time to formulate 2019 proposals, so even larger changes may occur for the 2020 coverage year.
MA plans are popular, in part, because some of them cover things that are not covered by original Medicare — primarily limited coverage of routine dental, hearing, and vision expenses, and memberships in health clubs. People using original Medicare must pay for these items, often by purchasing specialized insurance.
If MA plans substantially expand coverage of non-medical care, the gap between the plans and original Medicare would widen, likely drawing more people into MA plans.
One of the largest coverage omissions of Medicare is that it does not cover long-term custodial care. Medicaid does provide such care, but people have to spend down nearly all of their wealth to qualify. The new MA changes authorize MA coverage for some of this care as well, providing another competitive advantage for the private plans.
Support within CMS for MA plans predates Republican control of Congress and the White House but has become stronger since the beginning of last year.
Original Medicare is largely a fee-for-service program that pays for health care regardless of how successful the treatments are for patients. People are covered for care from any doctor or hospital that accepts Medicare, and nearly all do.
MA plans, by contrast, represent a managed-care approach that can be less costly, linked to patient outcomes, and provided as part of a personal care plan tailored to individual patients. Managing patient care is widely seen as a more practical path to controlling health costs while also improving patient well-being.
However, MA plans usually achieve their efficiencies by requiring people to get care from within a plan’s provider network of doctors and hospitals. These networks often limit patient choice and have had been associated with substandard care in some situations. Whether these are growing pains or fundamental constraints of managed care is, to say the least, a major focus of health researchers.
While the jury is still out on that matter, Medicare enrollees have not been waiting for a formal verdict. They like the convenience of MA plans, their lower cost, and their coverage of things not covered by original Medicare. Expanding MA plan coverage to non-medical assistance will make the plans even more appealing.
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: firstname.lastname@example.org.
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