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Balls of Confusion
January 15, 2009 • Volume 9, Issue 2
For 2009, people with Medicare living in
, have a choice of 92 different Medicare private health plans (also known as “Medicare Advantage” plans). Coventry Health Care alone offers 11 different plans, Geisinger offers 17 choices, and the rest of the companies generally have between four and eight plans on offer. Reading, Pennsylvania
is not unique. People in many parts of the country have 50 or more Medicare private health plans to choose from and face a similar number of choices for prescription drug plans. Reading
Is so much choice a good thing?
Many people with Medicare say the sheer number of choices, and the almost infinite variety of benefit designs, is confusing and makes the plan selection process more difficult. Confusion makes consumers more vulnerable to deceptive marketing tactics and less able to identify hidden costs buried in the plans’ benefit packages.
The Centers for Medicare & Medicaid Services (CMS) could help consumers with the plan selection process by
- cutting down on the offerings by each company,
- standardizing benefit packages so people can make apples-to-apples comparisons, and
- ensuring that all plans provide minimum financial protections.
Limiting the number of offerings by each plan:
One company, for example, offers two HMO options with identical copayments for medical care and a $3 difference in premiums. One plan has no deductible and flat copayments for Part D coverage; the less expensive plan has a $295 deductible and charges 25 percent coinsurance. Given consumers’ preference for no-deductible plans, is this second option necessary?
Standardizing benefit packages:
, some Medicare private health plans charge per-day fees for the first five, six or eight days of a hospital stay. Others charge a flat fee ranging from $100 to over $1000, and still other plans charge patients a percentage of the cost. Deductibles range from $0 to $1000. There are plans with no cap on out-of-pocket spending for enrollees, and plans with out-of-pocket maximums as low as $2000 and as high as $7500. There are plans that cover all services under the out-of-pocket maximum, while others exclude Part B drugs for chemotherapy and transplant patients, wheelchair purchases or mental health services, although it takes some digging to find which services are excluded. There is no guarantee that a high-premium plan from one company provides better coverage than the low-premium offering of its competitor; one company’s “Gold” plan is another company’s “Basic” plan. Reading
Ensuring minimum financial protections:
Consumers who throw up their hands and take their chances can be in for nasty surprises. Some plans offer no protection against high medical costs, set the out-of-pocket cap so high that only a fraction of enrollees would benefit or exclude crucial services from counting toward the out-of-pocket maximum.
In its draft Call Letter for 2010, which sets next year’s contract terms for Medicare private health and drug plans, CMS has indicated that it is looking for insurers to consolidate plan offerings that have low enrollment or offer little added value in benefit. This effort may help reduce the sheer volume of plan choices. But it will do little to facilitate consumers’ plan selection unless it is coupled with a move toward standardizing benefit options and ensuring that all plans offer comprehensive financial protections for enrollees who need high-cost medical care. The incoming Obama administration should ensure the final 2010 Call Letter takes those steps as well.
“For 2010, [Medicare Advantage Organizations] must ensure that the array of [Medicare Advantage] choices presented in each service area can be reasonably evaluated and compared by beneficiaries in terms of cost sharing, provider networks, and benefit design, including Part D offerings. (Draft 2010 Call Letter, Centers for Medicare & Medicaid Services, December 2009)
“I signed my mom up for a Medicare Advantage Plan on the premise that her primary care physician participated in the plan. He was listed in the book, on the website, and verified when the representative came to the house to sign her up. Also, the benefits card she received in the mail had his name on the card as her PCP. However, he does not participate (as of 2005!) and she has since run up $600 in bills that the Medicare Advantage plan will not pay. I have had MANY conversations with the Medicare Advantage plan to resolve the issue. They insist he is on the plan but his claims officer states their claims have been repeatedly denied and she has worked tirelessly to try and help my mom navigate the system. Sadly, the doctor's office has advised us to look for a plan doctor to take care of her. This has caused my mother MUCH anguish over losing her trusted physician that has taken care of her for the past 20 years.” (Story submitted to the Medicare Private Health Plan Monitoring Project,
, May 2008) Medicare Rights Center
“In fact, some researchers find that too much choice can actually lead people to take less positive risks in making selections and to use simplifying strategies in lieu of more considered choices.” (Too Many Choices, Monitor on Psychology, June 2004)
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Medicare Rights Center’s new Medicare Part D Appeals: An advocate’s manual to navigating the Medicare private drug plan appeals process offers an easy-to-understand, comprehensive overview of the entire appeals process, including real-life case examples, a glossary of important appeals terms, a sample protocol for advocates, and links to important resources.
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Medicare Part D Monitoring Project
would like to hear about your experience, or that of someone you know, enrolled in a private drug plan. With information about what the issues are with Medicare Part D, we will be able to demand that those problems be fixed. Medicare Rights Center
Submit your story at http://www.medicarerights.org/about-mrc/newsletter-signup.php.
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