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One of the disadvantages of the Medicare Advantage plans is that they often have a limited network of doctors. Photo by Jo...

The good, the bad and the ugly of picking Medicare Advantage plans

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.

Nearly half of all new Medicare enrollees are signing up for Medicare Advantage plans, which now account for about 35 percent of the entire Medicare market.

The other 65 percent of Medicare beneficiaries are in what’s called original Medicare, which consists of Part A (hospital, nursing home) and Part B (doctors, equipment, outpatient expenses). Those patients usually have a private Part D drug plan, and a quarter have a private Medigap supplement policy.

Medicare Advantage (MA) plans must cover everything that original Medicare covers, and they can’t discriminate against people who are ill or have preexisting conditions. Anyone, regardless of their health, can get an MA plan or switch to one during open enrollment, which continues through Dec. 7.

Medicare rules have also changed and will permit anyone with an MA plan to switch to another MA plan or opt for original Medicare during the first quarter of 2019; those changes will take effect the month after they have been made.

As noted often in earlier Ask Phil columns, Medicare Advantage plans have lots of beneficial aspects to them, but also lots of yellow — if not red — lights for people to heed as they decide whether to enroll.

First, the positive features.

The “good”

A single insurance plan: MA plans offer all your insurance needs through a single insurance company plan. Ask anyone who’s had to manage three sets of documents – from a government-appointed contractor for original Medicare, a private insurer for Part D, and a private Medigap insurer – and the benefit of dealing with a single entity becomes clear. You might even call it an…advantage!

Additional coverage: Most MA plans go further than original Medicare and cover things that it does not, chiefly dental, hearing and vision care, along with health club memberships and an expanding list of attractive non-medical benefits such as transportation to doctors’ appointments and the delivery of nutritious meals to folks who are recuperating at home from hospital stays. These bells and whistles are likely to attract more MA converts. I’ll have more about them in a bit.

Lower costs: The greatest appeal of MA plans likely is their low costs. More and more MA plans are charging zero premiums after a person has paid the government their monthly Part B premium, which will be $135.50 next year for most individuals.

MA plans usually offer two or three ceilings on out-of-pocket spending – one for their Part D drug plans, one for in-network medical expenses, and often another one for out-of-network expenses. People with MA plans thus do not need Medigap plans and, in fact, it is illegal for an insurer to sell a Medigap plan for use with an MA plan.

The “bad”

Limited networks: The existence of medical provider networks is a big fork in the road separating MA plans from original Medicare. MA network limitations should be carefully explored by anyone thinking of an MA or considering whether to keep the one they have.

People with original Medicare are covered for services from any doctor, hospital and other caregiver in the country that accepts Medicare. This includes nearly all caregivers, although it is true that it can be hard to find caregivers in some parts of the country who are accepting new Medicare patients.

MA customers, by contrast, are usually restricted to getting care from doctors and organizations included in their plan’s provider network. Most MA plans are HMOs, or health maintenance organizations, that have what are called narrow networks – relatively small groups of providers located only in the plan’s home market. Plans with broader networks and larger geographic service areas are known as PPOs, or preferred provider organizations. They provide more provider choice and cost more than an MA HMO.

Historically, people who travel around the country a lot and have second homes in warmer climates have avoided MA plans because of network limitations. Increasingly, however, MA insurers are offering these “snowbirds” dual market and other expanded geographic coverage options.

The “ugly”

Managed care: One reason MA plans can offer more benefits and often charge less is because they can save money on medical expenses through their business agreements with members of their provider networks. The bigger source of savings, however, is that MA plans are managed care plans.

Original Medicare is what’s called a fee-for-service program. If you want a procedure that Medicare approves, it will be covered by original Medicare. MA plans, by contrast, would look for low-cost providers of such procedures. They usually require enrollees to get pre-authorization from their plan before approving coverage and may require less-expensive treatment alternatives.

The push toward Medicare Advantage

These controls are at the heart of criticisms that many advocacy groups, including the Medicare Rights Center, the Center for Medicare Advocacy, and the National Committee to Preserve Social Security & Medicare, have of MA plans.

Included in their concerns is the very clear preference by federal health regulators for MA plans over original Medicare. This tilt began during the Obama Administration and was driven by the desire to limit health-care expenses and improve the health of Medicare enrollees at the same time. Managed care became the preferred pathway for these efforts, and MA plans were favored because they already had many of the management tools in place to do so.

Under President Trump, the preference for MA plans has become even more pronounced, in large measure because of his administration’s preference for private insurance programs in favor of government-run efforts.

The Centers for Medicare & Medicaid Services (CMS), which oversees Medicare, is implementing new MA benefits that are currently not available from original Medicare. Next year, not many plans will offer these new benefits, but they should be widely available in 2020.

According to Forbes, one insurer — Anthem — will be testing in several states new services that include home-delivered meals, transportation to doctor appointments, limited in-home support from a health aide and up to $500 for home safety devices.

Brent Sanders, who oversees Cigna MA marketing, said transportation benefits and home delivery of meals are “the two big ones” in terms of his firm’s non-traditional MA benefits next year. Some benefits will cost extra while others will not. Where available, such features will be offered as a package within Cigna plans but not available for purchase as individual benefits.

Christopher Ciano, head of Aetna Medicare, said Aetna is providing several new benefits and is expanding its MA offerings into hundreds of new markets. “Picking an MA plan should be a holistic experience for a customer,” he said in a phone interview. “You should look at all the critical benefits that are important to you. You can’t use just a premium or an out-of-pocket maximum” to make your choice.

Navigating your choices

Medicare’s online Plan Finder can help people compare things likes premiums and projected plan expenses. But it is not designed to make useful comparisons with non-monetary aspects of MA plans. Even when I knew a specific plan was offering new non-medical benefits, they often weren’t included in Plan Finder or not clearly explained.

Realistically, the only way to get a detailed understanding of MA benefits is to call individual insurers, and this is what insurers prefer anyway, so they can directly impress you with the virtues of their plans. Aetna and other insurers are beefing up their consumer communication programs.

“We don’t want beneficiaries to get into a plan and not understand it and not be satisfied,” Ciano said.

Consumers can get non-biased Medicare advice from the State Health Insurance Assistance Program (SHIP). SHIP counselors traditionally have been more equipped to help people with questions about original Medicare than private MA and Part D drug plans. But the growth of new MA benefits and the growing popularity of MA plans will require SHIP counselors to broaden their insurance skills.

In most respects, the new MA benefits available in 2019 will be a test run for the more significant expansion of MA offerings for 2020. Plan Finder, in particular, will need to do a much better job to help people find and compare plans with these new benefits.