Half of Kentuckians on Medicare now have Advantage plans, but such plans have smaller networks and marketing issues

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By Melissa Patrick
Kentucky Health News

With open enrollment for Medicare plans up and running, it's important that seniors pay close attention to what each type of Medicare plan offers and to make sure to choose a plan that meets their needs.  

Increasingly, seniors are choosing privatized Medicare Advantage plans over traditional Medicare, but are leaving those plans when they get older and sicker because they don't offer what they need.

The Kaiser Family Foundation reports that nearly half, or 48%, of the eligible Medicare population, had enrolled in a Medicare Advantage plan in 2022. In Kentucky, where health-insurance giant Humana is based, the share of Medicare beneficiaries in such plans is already 50%. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to 61% by 2032.

A survey by The Commonwealth Fund, a foundation aimed at improving health care, found that more benefits and a limit on out-of-pocket costs are the main reasons seniors gave for selecting Medicare Advantage, while greater selection of providers is cited by those opting for traditional Medicare.

The report on the survey explains the trade-offs between Advantage and traditional plans: "Advantage plans typically provide some coverage for benefits not included in traditional Medicare, such as eyeglasses. Plans also have a cap on out-of-pocket expenses for services covered by traditional Medicare, while traditional Medicare does not have a similar limit.

"On the other hand, traditional Medicare allows beneficiaries to go to any doctor, hospital, or other health care provider that accepts Medicare, without the need for prior approval; Medicare Advantage enrollees typically need a referral from their primary care physician as well as plan approval if they want services from specialists, such as oncologists, covered by the plan." 

The survey found that while about 40% of the Medicare beneficiaries surveyed said they did not receive any help choosing their plan, about one in three of them, regardless of coverage, used an insurance broker or agent to choose a plan. 

In addition, it found that less than 10% of those surveyed, regardless of coverage, said they used the free federal Medicare.gov website and 24/7 hotline or the State Health Insurance Assistance Program, which is a free service that provides information, counseling and assistance to seniors and disabled individuals, their families and caregivers about their health insurance coverage, benefits and consumer rights. 

That matters, because it's important for beneficiaries to know that their broker or agent is getting paid a commission by the insurers, which can influence the information they provide whereas government funded programs are designed to provide unbiased, one-on-one help, the authors write. 

Ongoing issues with Medicare Advantage

Medicare Advantage is supposed to save money by paying health-insurance companies set fees for managing the care of each enrollee. Last year, Bob Herman of Axios reported that Advantage plans are falling short of their promise, noting that federal spending on them has outpaced enrollment growth in every year since 2015.

Herman notes that private-plan contracting that results in a narrower network of doctors and hospitals has not yielded savings to Medicare. He writes that many seniors don't stick with Advantage plans, often ditching them in the last years of life because they get sicker and need more care, and their Advantage plans limit access to the doctors, hospitals, nursing homes and hospice care that they want. 

More recently, Victoria Knight of Axios reported on the increasing complaints about the aggressive marketing tactics being used by Medicare Advantage plans that have led to seniors being signed up for plans without their consent or enrolling in plans that don't offer the benefits they were promised. 

The Centers for Medicare and Medicaid Services, acknowledging the problem, now requires marketers to include disclaimers in advertisements about plans, to discourage deceptive sales practices, Knight reports. She says CMS received almost 40,000 complaints from beneficiaries about the marketing of Medicare Advantage plans last year, up from about 5,700 in 2017. 

In the U.S. House, more than 30 Democrats, led by Ways and Means Health Subcommittee Chair Lloyd Doggett (D-Texas), have recommended changes to Medicare Advantage that would rein in aggressive and misleading marketing, protect taxpayer dollars, prevent delays and medically unnecessary restrictions to accessing care, and end a program that puts beneficiaries into arrangements that are similar to Medicare Advantage without their knowledge or consent.  

Open enrollment for Medicare runs through Dec. 7, for coverage starting Jan. 1. Open enrollment is a time that allows seniors to join, switch or drop a plan. 

If you are already enrolled in a Medicare Advantage Plan, you can switch to a different Advantage plan or switch to traditional Medicare one time between Jan. 1 and March 31, for coverage that starts the first day of the month after you ask to join the plan. Click here to learn more about how to join, switch or drop a Medicare plan on Medicare.gov. 

One question to be sure to ask if you choose to switch back to a traditional Medicare plan is whether you will have access to Medigap coverage without an insurer scrutinizing your health status, recognizing that if you have developed a pre-existing condition, you may be ineligible for a Medigap policy. 

A Medigap plan is also called a Medicare supplement. It  is sold by private companies to help pay some of the health care costs that traditional Medicare does not cover.