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Why don’t more Medicare recipients shop for better plans?

by Paula Span, The New York Times | November 8, 2021 at 1:43 a.m.

One morning recently, Eunice Korsah spent about half an hour on the phone being guided through the complexities of various plans for Medicare Part D, which covers prescription drugs.

Korsah is a retired nurse in Burke, Va., and her current drug plan was being discontinued. The insurer wanted to move her into one with sharply higher premiums.

"I decided, 'No way,'" she said. But what to replace it with? She looked at the Medicare website for Part D plans available in her county and found 23, with monthly premiums ranging from $7.10 to $97.30.

Jack Hoadley, a health policy researcher at Georgetown University, has for two years volunteered with the State Health Insurance Assistance Program, or SHIP, the federally funded, free counseling service that helps Medicare beneficiaries find the coverage that's best for them.

"Some very smart people just don't know how Medicare works and get confused," Hoadley said. For example, "it can make a $1,000-a-year difference if you're willing to try several different pharmacies."

Korsah, 74, had ready a list of her eight medications and their doses. Using the online Medicare Plan Finder, Hoadley narrowed the field to three suitable selections.

With the cheapest plan, from Wellcare, Korsah's estimated total yearly drug and premium costs would be $301 a year if she used a CVS or Giant pharmacy — but $1,125 if she took the same prescriptions to a Walmart. Conversely, a Humana plan would cost $525 a year through a Walmart pharmacy, but more than twice that at CVS. With a Cigna plan, the best deal involved a mail-order pharmacy.

In theory, all beneficiaries who have traditional Medicare with Part D coverage, or who are interested in or enrolled in Medicare Advantage programs (an "all-in-one" alternative offered through private insurers), should be making similar calculations during this annual open enrollment period, from Oct. 15 until Dec. 7.

It's the reason that insurers' pitches for plans are showing up in their mailboxes and inboxes, and on TV ads featuring Joe Namath and Jimmie "Dyn-o-mite" Walker.

"The idea is that consumers can reevaluate what coverage is best for them," said Tricia Neuman, the executive director of the Program on Medicare Policy at the Kaiser Family Foundation. Since each year brings changes to Part D and Medicare Advantage — in premiums, benefits, copayments and provider networks — shopping around makes sense.

But that's not what happens.

For 2019, 71% of beneficiaries said they didn't compare plans during open enrollment, according to a recent Kaiser study. The rate was even higher among Black and Hispanic beneficiaries, people older than 85 and those with lower income and fewer years of education.

Roughly half of respondents had never visited the official Medicare website, used its 1-800-MEDICARE help line or read the "Medicare & You" handbook that annually arrives by mail.

Accordingly, “there’s not a lot of switching,” Neuman said. Kaiser found that in 2019, only 8% to 10% of beneficiaries voluntarily changed their Medicare Advantage or stand-alone Part D plans.

Some of that inertia may reflect people’s satisfaction with their coverage; it might also indicate an overwhelming amount of choice. For 2022, beneficiaries face an average of 33 Medicare Advantage plans to select from (but 56 in Philadelphia and 63 in Cincinnati) and 30 stand-alone Part D plans.

“It is hopelessly, needlessly complicated and it continues to get more complicated,” said David Lipschutz, associate director of the Center for Medicare Advocacy. “The entire system relies on savvy actors maximizing their choices, and that just does not happen.”

Even those who are motivated to comparison shop can have trouble finding reliable information. Most overtures and ads come from brokers or agents with financial incentives, though the offers may mimic official Medicare communications.

Moreover, “brokers typically only market a portion of plans,” sometimes excluding the most advantageous, a fact they’re not required to disclose, said Gretchen Jacobson, a vice president of Medicare at the Commonwealth Fund, a foundation which supports health research.

The Center for Medicare Advocacy, a nonprofit group, has charged that Medicare itself has shown bias toward private Medicare Advantage plans in its promotional materials, starting in 2017.

“They started overplaying some of the benefits and downplaying some of the negatives,” Lipschutz said. “I think they wanted private health insurers to thrive.”

Medicare has since resumed a more neutral stance, but “they still have a way to go,” Lipschutz said.

TOO MANY FOUR-STAR PLANS?

As for the star ratings that Medicare awards, critics have begun to invoke “the Lake Wobegon” effect (after radio personality Garrison Keillor’s fictional town where “the children are all above average”). Medicare gave four stars or higher to 68% of 2022 Medicare Advantage plans with drug coverage, making the rankings less than useful for comparisons.

How much does all this matter? With Part D, choosing the most cost-effective plan goes beyond a financial issue, because skipping unaffordable medications can have health consequences. And choosing between traditional Medicare and Medicare Advantage involves substantial differences in the health care experience.

ADVANTAGES WITH DISADVANTAGES

Medicare Advantage plans, so increasingly popular that 42% of Medicare beneficiaries are now enrolled in one, offer one-stop shopping. They include a Part D benefit and don’t require a supplemental Medigap policy to cover copayments and deductibles.

They put a cap on out-of-pocket expenses ($7,550 for in-network coverage in 2021). They also promote “extra benefits” like dental, hearing and vision coverage, and transportation — though “they may not be very generous,” Jacobson said. However, some services aren’t available to everyone in the plan, and beneficiaries can’t learn if they’ll qualify until after they’ve enrolled.

Medicare Advantage also restricts full coverage only to doctors, hospitals and pharmacies within their networks; if patients go outside the network, they face higher costs or may have to pay entirely out of pocket. In-network providers change frequently, and it can be challenging to ascertain which ones a plan includes.

Still, a recent Commonwealth Fund analysis found that traditional Medicare and Advantage plans (excluding special needs plans) now attract similar populations in terms of demographics and health, with high rates of satisfaction in both groups (though both reported waiting more than a month for a doctor’s appointment).

Advantage beneficiaries are more likely to receive some care management services, such as a review of their medications, the study found. But when it comes to patients’ health, “it doesn’t seem to change the outcomes much,” Jacobson said, because hospitalization and emergency room use were roughly the same for both groups.

That raises the question of whether the federal government should continue paying Advantage plans 4% more per beneficiary than it pays for those in traditional Medicare. Everyone who pays a Part B premium, which is almost every beneficiary, winds up subsidizing that higher cost.

But for now, it’s open enrollment season. SHIP programs in every state, with 12,500 trained team members, represent the best source of unbiased information and work with more than 2.5 million people each year.

Print Headline: Navigating medicare paralyzing

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