It is open enrollment season for Medicare. And retirees have the typical uncertainty about what to do. Possibly the most crucial question: Should you enroll in a Medicare Advantage managed care plan or in standard Medicare?
As with nearly everything in the insurance industry, the answer depends. In 2022, about half of all Medicare recipients were enrolled in MA plans, which is twice the proportion from 2009. But there is a lot to think about before you join them.
Privately-run MA plans are often less expensive for seniors than the combination of Medicare Part B coverage for physician care, Medicare Part D prescription coverage, and Medicare Supplement insurance, partly because of large government subsidies (some would say unnecessarily generous subsidies) (Medigap). And they frequently include additional benefits, such as vision and dental coverage or gym memberships.
Increasingly, MA plans offer minimal personal care coverage for chronically ill individuals living at home. And they promise coordinated treatment for patients with numerous diseases or who see several physicians.
However, there are tradeoffs. Before seeing a specialist, you will likely require a reference in Massachusetts. And you may incur substantial out-of-pocket expenses if you utilize an out-of-network physician, hospital, or skilled care facility. In conventional Medicare, you often have far more options.
How do these two Medicare plans compare?
Cost: In 2019, premiums and other out-of-pocket expenditures averaged $3,524 for MA plan participants, compared to $5,489 for those enrolled in conventional Medicare, according to research conducted by the consulting company ATI advising for the Better Medicare Alliance, which represents MA plans. The discrepancy was comparable across the majority of racial and ethnic groupings and those with little physical or cognitive impairments. Even more significant was the disparity for individuals with severe disabilities.
Access: Networks vary greatly from MA plan-to-plan and from year to year within a single plan.
This year, specific MA plans and prominent health systems are in a stalemate that might limit patient coverage. For instance, the Mayo Clinic informed patients in Florida and Arizona that it is “out of network” with most MA plans. It will continue to serve people who regular Medicare covers.
The network may be beneficial if you reside in a rural or other underserved community. For instance, if there is just one hospital within 100 miles of your house, you may want to avoid an MA plan that does not include that hospital in its network.
This can also be a problem for those with complicated medical issues. Care might be costly if your condition’s specialists are often out of network. Conversely, the care coordination promised by plans can save the lives of individuals with chronic diseases if the plan is effective.
Quality: This might be the deciding factor for several buyers. Does Medicare Advantage or regular Medicare provide superior care? Unfortunately, there is no apparent answer.
In September, the Kaiser Family Foundation (unaffiliated with the Kaiser Permanente health plan) issued a study analyzing hundreds of peer-reviewed research that compared Medicare Advantage to standard Medicare.
The study discovered a few differences between Medicare Advantage and regular Medicare that are supported by robust data or have been reproduced in several research. Patients with Medicare Advantage and conventional Medicare expressed comparable satisfaction and care coordination levels. Medicare Advantage surpassed conventional Medicare on several metrics, including utilization of preventative treatments, having a primary source of care, and hospital readmission rates. However, conventional Medicare exceeded Medicare Advantage on other indicators, such as obtaining cancer care in the highest-rated hospitals, skilled nursing facilities, and home health agencies.
Enrolling in a Medicare Advantage (MA) plan is only the beginning. Then, you must choose which plan to purchase. Each one is unique, and various premiums and out-of-pocket maximums are available. In their formularies, they may contain several drugs.
You can compare all Medicare & Medicaid plans in your zip code using the Centers for Medicare & Medicaid Services online tool.
Some plans have a $30 monthly premium and an annual out-of-network maximum of $7,550. Another plan offers no premium, but in-network payments are limited to $8,300. Some plans include coverage for medical transportation, while others do not. Others do not cover medical treatment abroad.
The CMS also contains a rating system for plans that offers information about the member experience. However, it is imperfect and cannot tell you a great deal.
For example, virtually all MA participants are enrolled in plans rated above average by the CMS. According to a new editorial in the JAMA Health Forum by Joan Teno and Claire Ankuda, this is not because the plans are so fantastic but because they have worked out how to rig the rating system. According to the two writers, the existing grading methodology for Medicare Advantage plans does not provide meaningful comparisons.
What does this mean for consumers? With significant choices and no apparent answers. As the saying goes, welcome to Medicare.