On October 15, 2022, Medicare opened its annual enrollment season. Health insurance options for seniors can be reviewed in this way. As this time of year approaches, they should also be prepared for a barrage of advertisements in their mailboxes and on TV.
Advertisements for Medicare Advantage, a fast-growing managed-care option to traditional Medicare and Medicare Part D prescription drug plans, have spiked consumer complaints. The Centers for Medicare and Medicaid Services, which runs Medicare, received 39,617 complaints in 2021, an increase of 155% over the previous year.
CMS also announced new rules to curb misleading advertising practices by third-party marketers for Medicare Advantage and Medicare Part D plans. In addition, insurance companies managing Advantage plans are reminded about new disclosure requirements. Whether brokers or call centers make claims, they are responsible for them.
Medicare Advantage plan marketing has also been a concern for state insurance regulators. Congress was asked to review federal law restricting state authority to supervise Advantage plans by the National Association of Insurance Commissioners in an email to Senate leadership. According to the organization, there has been an increase in complaints regarding “confusing, misleading and possibly deceptive advertising of these plans.”
The reason for this is that Advantage now accounts for nearly half of all Medicare enrollments. According to the Kaiser Family Foundation, Medicare Advantage enrolls 48% of beneficiaries. The number of Medicare beneficiaries is 58.6 million, which amounts to 28.4 million.
The heavy marketing of Medicare plans can further complicate a complicated process. There is a complex trade-off between upfront premium costs, out-of-pocket limits, and provider restrictions when deciding whether to choose traditional fee-for-service Medicare or Medicare Advantage.
Your financial health can be significantly affected by these choices. A wrong insurance policy can negatively affect your health.
Traditional Medicare vs. Medicare Advantage: A Nuanced Choice
Commissions earned by third-party marketing agencies, such as call centers and brokerages, are the main concern. Marketing pitches often claim that Medicare Advantage plans offer additional benefits like dental coverage and gym memberships, as well as being cheaper than traditional Medicare.
Medicare Part B (outpatient care) requires all Medicare enrollees to pay a monthly premium. Typically, Medicare patients with a traditional fee-for-service plan buy a Medigap supplement policy that caps their out-of-pocket expenses. These add-ons are not required by many Medicare Advantage plans, however.
Traditional Medicare offers the best out-of-pocket expense coverage when combined with a Medigap supplement plan. The out-of-pocket limit on Medicare Advantage is not unlimited. According to the Kaiser Family Foundation, this year, in-network services cost an average of $4972.
Since Medicare Advantage plans have large marketing budgets, consumers are forced to make a difficult choice between them and traditional Medicare. Since Medicare enrolls annually from October 15 to December 7, this is the reason.
In the United States, almost all healthcare providers accept traditional Medicare. Advertising budgets are few and far between. Most insurance plans no longer offer this feature. A highly rated specialist or facility not covered by Medicare Advantage could prove vital if you’re diagnosed with a serious illness.
There aren’t any ads for traditional Medicare. But there are a lot of ads for Medicare Advantage plans, although the ads don’t usually explain how they work,” said Gretchen Jacobson (vice president of Medicare) at The Commonwealth Fund.
Third-party brokers market Medicare Advantage plans, according to a Commonwealth Fund study. According to Jacobson, enrollees should consult a broker before making complex decisions. In addition to selling their products, brokers collect commissions from their clients. Brokers may not present enrollees with comprehensive coverage options.
According to a Commonwealth study, only 43% of Medicare Advantage plans and 65% of Medicare Part D plans are available through online brokers’ plan selection tools.
It is important to have commission structures. According to the Commonwealth Fund, the financial interests of brokers and beneficiaries may conflict. CMS determines Medicare Part D, Medicare Advantage, and Medigap broker commissions. Payments from insurers may vary and are paid at the time of first enrollment in Advantage plans. Brokers may also earn bonuses if they meet enrollment targets. According to Jacobson, bonus payments are not regulated by CMS and are not reported.
“Ideally, the financial incentives for brokers and beneficiaries would be aligned perfectly,” Jacobson suggests beneficiaries be informed when they aren’t.
A Medicare Advantage advocacy and research group support the new CMS rules for third-party marketing organizations.
Mary Beth Donahue leads the Better Medicare Alliance. We are happy about these policies because Medicare advantage has a powerful, factual story to tell about how it is lowering costs, enhancing benefits, and improving health outcomes.
Congress was asked to comment on a request from the National Association of Insurance Commissioners. The organization stated, however, that Medicare Advantage regulation should remain federal.
Why Choosing the Right Medicare Plan at Initial Enrollment is Important
When enrolling in Medicare, you must choose between traditional Medicare and Medicare Advantage.
The marketing pitch for Medicare Advantage plans might sound appealing to a 65-year-old healthy person, but your healthcare needs change as you age. Terrence Cunningham, director of administrative simplification policy at the American Hospital Association, said enrolling in Medicare Advantage or traditional Medicare isn’t just about cost. Also, receiving care can be adversely affected by it.
It is theoretically possible to switch from traditional Medicare to Medicare Advantage during fall enrollment. If you sign up for Medicare, however, you may not be able to enroll in Advantage. Due to the rules regarding Medigap supplemental coverage and preexisting conditions, this is the case.
If you sign up for traditional Medicare, you will need supplemental Medigap coverage. During the 6-month Medigap Open Entry Period, you can purchase this “guaranteed problem.” If you are 65 or older and enrolled in Medicare Part B, you can purchase this coverage.
In traditional programs, you can see any Medicare-accepting provider. The majority of providers do. Your Medicare Advantage plan encourages you to visit providers in your network.
Plan denials have been a source of concern for regulators overseeing Medicare Advantage. A report by the Office of the Inspector General of the U.S. Department of Health and Human Services was issued earlier in the year. The report noted that Medicare Advantage audits “has highlighted widespread and persistent issues with inappropriate denials of service and payment.” Denials of requests that “satisfy Medicare coverage rules” can delay or hinder beneficiaries’ access to care and burden providers.
As a result of a request from Medicare for public comments on the Medicare Advantage program, the American Hospital Association has expressed concerns about the program. There have been “several serious concerns” expressed about the policies and practices of Medicare Advantage Organizations. As a result of these inequalities in coverage, gaps in coverage exist between Medicare beneficiaries who are covered by Medicare Advantage and those with traditional Medicare coverage. Occasionally, the letter states that delays or denials of care can directly adversely affect Medicare beneficiaries in some cases.
In a review of over 60 studies, the Kaiser Family Foundation compared Medicare Advantage with traditional Medicare. The factors considered were beneficiary experiences and outcomes, affordability, healthcare use, and quality. The results of the review were not differentiated based on evidence. These are some of the key findings:
- Both Medicare Advantage and traditional Medicare beneficiaries reported similar levels of satisfaction with their care and overall measures in care coordination.
- In some areas, Medicare Advantage outperforms traditional Medicare, including preventive services, stable healthcare providers, and lower hospital readmissions.
- Medicare Advantage outperformed Traditional Medicare in measures like receiving care at the best-rated hospitals for treating cancer or skilled nursing facilities and home health agencies.
- A smaller percentage of traditional Medicare beneficiaries had to deal with a cost-related problem. This was due to the combination of traditional Medicare and supplemental coverage such as Medigap or a retiree-supplemental benefit.
Resources to Help You Choose a Medicare Plan
In addition to switching between Original Medicare and Medicare Advantage, you can modify the coverage of your existing Medicare Part D or Medicare Part A plan during open enrollment. As a result, you will be able to ensure that you get the best financial deal and the best possible drug coverage and healthcare providers that meet your needs.
Your Advantage or Medicare prescription drug plan provider will send you an Annual Notice of Change letter every autumn. A summary of any changes to your current plan’s cost-sharing and coverage of certain medications is provided in this annual notice. A specific drug’s coverage is also explained.
Even if your current Medicare plan is satisfactory, you should look closely at it during open enrollment. Your prescription drug plan coverage may change each year. Advantage plans can change their network of healthcare providers at any moment.
Those enrolled in traditional Medicare and Medigap supplements don’t need to reevaluate their Medigap policies. You should review your Medicare Part D drug plan annually to determine what drugs are covered, at what price, and how they are delivered if you have both traditional Medicare and Medicare Part D.
Each state has a State Health Insurance Assistance Program network that provides one-on-one assistance. These programs are federally funded and staffed by trained volunteers.
Medicare Consumer provides free consumer assistance online or you can call and get connected with a licensed agent at 888-808-6168 today.
