Medicare open enrollment is right around the corner, and a lot has changed since last year. What do you need to know?
Open enrollment for traditional Medicare, Medigap, Medicare Advantage and Part D starts Oct. 15 and ends Dec. 7. Consumers can enroll in or change plans during this period. (Anyone who turns 65 or loses other coverage, having a “life event,” can enroll other times of the year.) But during this period, you have choices to make.
First, for a firm grounding, look at our “How much does Medicare cost?” post. Learn what experts say year after year, about things like the difference between Medicare and Medicare Advantage.
For this year, one thing you should know: The federal government is cracking down on misleading advertising, the practice of overselling the benefits of Medicare Advantage — including the flood of celebrity ads featuring the Joe Namaths and William Shatners of the world with their “free vision and dental!” and “Get money back!” pitches.
These sunny promises are a big factor in why more than half of the nation’s 65 million Medicare-eligible people choose Medicare Advantage, the privatized version of the federal program for older and disabled Americans, over traditional Medicare, the government-run version.
New federal regulations went into effect Saturday, Sept. 30, intended to crack down on the hucksterism and inflated promises that fill the airwaves and mailboxes around this time of year. The celebrity advertisers are supposed to identify who they are working for, and not misuse the official traditional Medicare card to make it seem that the Medicare Advantage plans are traditional Medicare.
In a press release in April announcing the changes, the Centers for Medicare and Medicaid Services wrote: “People with Medicare deserve to have access to accurate information when making coverage choices, and to be able to get the care they need without excessive burden or delays,” said Dr. Meena Seshamani, CMS Deputy Administrator and Director of the Center for Medicare.”
Types of deception
This deceptive advertising is bringing people to sign up for something they don’t understand, thinking that Medicare Advantage is easy to use and inexpensive, and offers wide access to all kinds of providers and low- or no-cost healthcare with little risk. (To know more about the difference between Medicare and the privatized Medicare Advantage program, read our “How much does Medicare cost?” post.)
The Kaiser Family Foundation studied advertising from the 2022 open enrollment period, and analyzed it for trends. Some of what the study found:
- “TV airways were flooded with ads for Medicare plans. Nearly 650,000 airings of Medicare ads appeared during the nine weeks of advertising, more than 9,500 airings per day. Most of these ads were aired in local media markets. While most TV ads were sponsored by health insurers, about one in every five TV ads were sponsored by brokers and other third-party entities, such as marketing firms.
- ”TV ads for Medicare Advantage comprised more than 85% of all airings for the open enrollment period for 2023. … Medicare Advantage ads were disproportionately sponsored by health insurers who offer plans that comprise a relatively small share of Medicare Advantage enrollees.
- ”TV ads for Medicare Advantage often showed images of a government-issued Medicare card or urged viewers to call a Medicare hotline other than the official 1-800-Medicare hotline.
- ”Some ads suggested that people with Medicare miss out on benefits to which they are entitled if they are not enrolled in a Medicare Advantage plan.
Most of the ads pointed to low costs and extra benefits, without mentioning quality ratings, the study found. And the Medicare Advantage ads often featured “active seniors engaged in physical activities,” but rarely people with health problems or disabilities.
Almost always, these ads omit information about traditional Medicare, leaving people with an incomplete picture of their choices, the study added.
“So-called Medicare Advantage is neither Medicare nor an advantage. It is simply another scheme by the insurance companies to line their pockets at the expense of consumers,” said Wendell Potter, a former insurance company executive turned whistleblower, in a press release issued by three senators trying to strengthen Medicare.quoting Wendell Potter, a former insurance company executive turned whistleblower, as saying.
Potter, a frequent Medicare Advantage critic, has pointed out that “the big insurers are now getting far more of their revenues from the pharmaceutical supply chain and from taxpayers as they have moved aggressively into government programs. This is especially true of Humana, Centene, and Molina, which now get, respectively, 85%, 88%, and 94% of their health-plan revenues from government programs….
“Numerous media and government reports have shown that the federal government is overpaying private insurers billions of dollars a year, largely because of loopholes in laws and regulations that enable them to get more taxpayer dollars by claiming their enrollees are sicker than they really are. The companies also make aggressive use of prior authorization, largely unknown in traditional Medicare, to avoid paying for doctor-ordered care and medications.”
But Medicare is free, right?
For many Americans struggling with the burdens of health costs, the idea that Medicare eligibility will end their healthcare spending struggles is alive and well. But not many people understand that this is not true. That’s probably a major reason why Medicare Advantage seems so attractive.
“A common misconception is that once a person becomes eligible for Medicare, they no longer need to worry about medical bills or choosing a health plan,” The Commonwealth Fund found in a 2022 study on this topic, on Medicare’s affordability problem. “For people choosing to enroll in traditional Medicare, most have supplemental coverage to help cover the cost-sharing payments and deductibles that are required. This supplemental coverage can be either a Medigap plan that they purchase, coverage from a union or former employer, or coverage from Medicaid. Some beneficiaries in traditional Medicare can’t afford to buy a Medigap plan or are restricted from purchasing one, don’t qualify for Medicaid, or don’t have access to employer or union-based coverage.
“Beneficiaries who choose to be covered through a Medicare Advantage plan — private insurance plans that contract with the federal government to provide Medicare-covered benefits — can have lower cost-sharing requirements and some coverage of benefits not included in traditional Medicare.
“Medicare Advantage plans, however, typically use tools, such as prior authorization requirements, to manage enrollees’ use of services, which can pose barriers to care.”
In other words: Narrower networks and more denials.
Medicare Advantage denial crackdown
Medicare Advantage plans have become well-known for denying treatment. In the spring, the Biden administration told them to stop.
In a 724-page rule posted by the Centers for Medicare and Medicaid Services, titled “Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare
Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly,” the federal government laid out what’s acceptable and not acceptable in terms of denying care.
The rules say that health insurers can deny care only if a healthcare professional with relevant expertise has reviewed the request. Any authorized service must stay in that status for as long as medically necessary to prevent disruptions to patients’ care, the rule says.
As always, the rule will need enforcement, so it’s worth watching for that. If you think care is being improperly denied, follow the appeals procedure on the site of the 1) provider, 2) insurer and 3) state enforcement agency.
Hospitals rejecting Medicare Advantage
Another Medicare Advantage development: A number of U.S. hospitals and hospital systems have announced that they will no longer accept Medicare Advantage.
Among the most recent are two Scripps Health groups, Scripps Clinic and Scripps Coastal, with 32,000 patients who will now need to either switch to traditional Medicare or find new doctors in the San Diego area, according to The Coast News. The two groups will continue to take traditional Medicare.
Scripps officials said they weren’t getting paid enough by Medicare Advantage. The Medicare Advantage enrollees now needing to switch may find that the combination of traditional Medicare, an optional Medigap policy (Part F or Part G) to cover uncovered medical expenses, and a Part D policy to cover drugs may be more expensive than their Medicare Advantage plan.
Scripps is not alone in abandoning Medicare Advantage. Beckers Hospital CFO report said others are doing the same. “Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers. Some systems have noted that most MA carriers have faced allegations of billing fraud from the federal government and are being probed by lawmakers over their high denial rates,” Beckers wrote.
A hospital in Bend., Ore., St. Charles Health, “is not only considering dropping all Medicare Advantage plans, but is also encouraging its older patients not to enroll in the private Medicare plans during the upcoming enrollment period in October,” Beckers wrote.
Others listed by Beckers: Adena Regional Medical Center in Chilicothe, Ohio, which asked for more money from Anthem’s Medicare Advantage plan; Corvallis, Ore.-based Samaritan Health Services, which quit its commercial and Medicare Advantage contracts with UnitedHealthcare; Baptist Health in Louisville, which went out of network with Humana’s Medicare Advantage plan; and Cameron (Mo.) Regional Medical Center, which “stopped accepting Cigna’s MA plans in 2023 and plans to drop Aetna and Humana in 2024. It plans to continue Medicare Advantage contracts with UnitedHealthcare and BCBS,” Beckers wrote. There are almost certainly others.
Fraud and greed
Meanwhile, Medicare Advantage continues to be a source of fraud and federal whistleblower complaints.
Cigna agreed to settle a lawsuit alleging Medicare Advantage fraud. A whistleblower and the U.S. Government accused Cigna of submitting false diagnostic codes to increase reimbursement. Cigna will pay $172 million in fines as a result of the settlement.
The former administrator of the Centers for Medicare and Medicaid Services, Donald Berwick, called out Medicare Advantage in a paper earlier this year called “Salve Lucrum: The Existential Threat of Greed in US Health Care” in JAMA Network.
“Particularly costly has been profiteering among insurance companies participating in the Medicare Advantage (MA) program,” he wrote. “Originally intended to give Medicare beneficiaries the choice of access to well-managed care at lower cost, MA has mushroomed into a massive program, now about to cover more than 50% of all Medicare beneficiaries and costing far more per beneficiary than traditional Medicare ever has. By gaming Medicare risk codes and the ways in which comparative ‘benchmarks’ are set for expected costs, MA plans have become by far the most profitable branches of large insurance companies. According to some health services research, MA will cost Medicare over $600 billion more in the next 8 years than would have been the case if the same enrollees had remained in traditional Medicare. Opinions differ about whether MA enrollees experience better care and outcomes than those in traditional Medicare, but the weight of evidence is that they do not.”
This has not gone unnoticed in Congress: “A big factor influencing Medicare solvency today is the growth of Medicare Advantage, a program that allows for-profit insurance companies to sell Medicare coverage that experts say is on target this year to charge – overcharge the government by $75 billion,” Sen. Elizabeth Warren said in a hearing recently.
Racial and economic gaps
“Expansion of the Medicare Advantage program during 2009–18 saw greater enrollment among racial/ethnic minorities and other traditionally marginalized groups,” according to a 2021 study by David J. Meyers, Vincent Mor, Momotazur Rahman and Amal N. Trivedi, all from Brown University, published in Health Affairs.” Growth was more rapid among Black, Hispanic, and dually enrolled beneficiaries than among White and nondual beneficiaries. The implications of greater heterogeneity in the program for enrollee outcomes are uncertain.” The full article is available with a subscription.
The Commonwealth Fund did a study earlier that had some similar findings.
“Between 2012 and 2015, the MA population grew younger and included greater proportions of racial and ethnic minorities,” the study found. “There were also more low-income beneficiaries, more living in poor neighborhoods, and more living in neighborhoods where few residents have college degrees….
“While chronic conditions had not become more prevalent by 2015, a greater proportion of beneficiaries had complex medical needs. Hospitalization rates were stable, but lengths of hospital stays increased as did use of observation stays and emergency department visits. Spending was 13 percent higher in 2015, largely because of spending on prescription drugs. Performance on several measures of health care quality improved, but medication adherence declined slightly.
“MA plans will need to develop targeted interventions to address beneficiaries’ social risks, avoid medical complications, and increase medication adherence. Plans also need to reduce spending on postacute care, for example, by expanding use of services provided in beneficiaries’ homes.”
A third study, published in 2022, found: “Between 2011 and 2019, [Medicare Advantage] experienced rapid expansions of 85.0% among older and 109.5% among younger enrollees. [Medicare Advantage] enrollees were increasingly likely to be dually enrolled in Medicaid, Black and, among younger enrollees, female,”
The authors, William B Weeks, Stacey Y. Cao, Jeremy Smith, Huabo Wang and James N. Weinstein, concluded: “Trends in demographic characteristics and changes in policy and growth in employer group plan offerings will likely continue to impact health care service utilization and costs in the Medicare population. Particularly as Medicare expansion to younger age groups is considered, future research should explore disparities in risk scores and care equity, quality, and costs across different Medicare enrollment options.”
What you can do
Things you can do for yourself or someone else on Medicare:
- Read our piece on “How much does Medicare cost?”
- Check facts on everything related to Medicare around the time of open enrollment. For example, I assess my current coverage every year. This year, my Part D drug premium with Aetna will go up to $31.00 a month for 2024, from $10.90 in 2023. I have started to buy a lot of medications from Mark Cuban Cost Plus, since they are generics and cheaper — using cash instead of using my Part D. So I looked at the coverage changes. Surprise: There’s a $3.70-a-month plan from Empire. Using the Medicare calculator, I learned that keeping my old plan, and buying the same medications, my out-of-pocket would be $1,214.74, as opposed to choosing the new plan and having an $258.60 out-of-pocket cost for 2024. Always re-assess your choices. Every year.
- Check the claims on advertising. We are not saying that all Medicare Advantage plans are bad, but a lot of the advertising overpromises or leaves out crucial facts.
- We don’t advise people on what insurance plans to choose, since we are not licensed brokers and since we will all hate our insurers from now until the end of time. But keep in mind that Medicare Advantage is essentially a private version of traditional network. This private version is a network, and you will need to stay within the network, requesting and receiving prior authorization, or have treatment denied. With traditional Medicare, you can go to any provider that accepts Medicare.
- Do you travel? Read the fine print. Medicare Advantage plans don’t generally cover anything but emergencies outside of the United States. If you have a Part G plan, you can choose one that has extra coverage outside of the U.S.
- Think you’ll take Medicare Advantage now and switch to traditional Medicare later? Think again. Mark Miller at The New York Times wrote this piece, pointing out “one of the least understood implications of selecting Advantage when you enroll in Medicare: The decision is effectively irrevocable.” The best or maybe only time to buy. a supplemental plan, called Medigap, is when you first join Medicare, he explains: “During the six months after you sign up for Part B (outpatient services), Medigap plans cannot reject you, or charge a higher premium, because of pre-existing conditions. After that time, you can be rejected or charged more, unless you live in one of four states (Connecticut, Massachusetts, Maine and New York) that provide some level of guarantee to enroll at a later time with pre-existing condition protection.” So if you’re not in one of those four states, and choose to switch out of Medicare Advantage and into traditional Medicare with a Medigap plan, that Medigap plan can and will use a health assessment to see if you have a pre-existing condition and charge more.
