By Joseph Burns
During open enrollment (Oct. 15 through Dec. 7), some experts recommend Medicare Supplement (also called Medigap) plans, particularly Plan G, for seniors enrolling in Medicare. Also, seniors in Medicare Advantage plans can switch to Medigap plans during open enrollment, although in all but four states, insurers enrolling seniors moving from MA to Medigap plans may require underwriting (meaning a review of past medical claims). After underwriting, insurers can charge much more or deny coverage. (Source: Medicare and You 2022, the official U.S. government Medicare handbook, page 76.)
There’s no denying that MA plans are attractive to seniors because many of them offer multiple benefits for low monthly premiums. But the TV ads and almost all the promotional materials from the Medicare program and the insurers themselves do not mention that when enrolling in MA, seniors face a huge risk because MA plans are unlikely to provide the best coverage for seniors over time. Despite the risks, 71% of Medicare beneficiaries did not compare their options when shopping for coverage in 2019, according to this October report from the Kaiser Family Foundation.
One of the nation’s experts on Medicare is health care journalist and former AHCJ president Trudy Lieberman (@Trudy_Lieberman). “People are being lured into Medicare Advantage plans with a false sense of security by the promise of no premium or a low premium,” she said.
“Medicare Advantage plans may leave gaps in coverage, and they come with large upfront, out-of-pocket costs. Also, MA plans usually have restrictive networks of hospitals and doctors.”
This year, the out-of-pocket limits for in-network services are $7,550 for in-network services and $11,300 for in-network and out-of-network services combined, the Kaiser Family Foundation reported in June. Meredith Freed, a Medicare policy expert at the foundation, said the out-of-pocket limits for 2022 are the same according to guidance the federal Department of Health and Human Services issued in May.
How to cover this growing concern
For more comprehensive coverage, journalists should recommend seniors to consider a Medicare Supplement (also called Medigap) plan instead of an MA plan because most seniors will need broad coverage at some point after they sign up at age 65, Lieberman said. The Medicare and You 2022 handbook show the 10 standardized Medigap plans that offer varying levels of coverage. Seniors can buy these plans from commercial health insurers in each state.
“A good Medicare Supplement such as Plan G should just about cover all of your out-of-pocket costs except for what you pay out-of-pocket for drugs,” she advised. “You pay a little more for a Medigap plan each month, but it’s worth it if you get sick. You will also need to buy a standalone drug plan to cover prescription medications.
“That’s what I have and that’s what most experts I’ve talked to suggest for seniors with chronic — meaning costly — ongoing conditions,” she added.
Here’s the problem for an MA member who signs up for an MA plan and just months or years later wants to change to traditional Medicare and a Medigap plan: In all by four states (Connecticut, Maine, Massachusetts and New York), health insurers will review their medical history in a process called underwriting. Using that process, insurers are likely to charge much more for a new policy if people have any serious medical conditions or decline to insure them altogether.
Those four states have what’s called guaranteed issue, which means insurers are required to issue a policy to all who apply. Outside of those four states, however, most people seeking to switch to a Medigap plan will be denied coverage if they have any preexisting conditions, Lieberman explained.
Useful resources for journalists
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This report from the Kaiser Family Foundation provides insight into “guaranteed issue”: “In All But Four States, Seniors on Medicare Can Be Denied a Medigap Policy Due to Pre-existing Conditions, Except During Specified Windows of Opportunity.” Foundation researchers found that in the other 46 states and the District of Columbia, insurers may deny a Medigap policy to seniors with preexisting health conditions, except during their initial enrollment when they start on Medicare, or when an applicant has a qualifying event, such as the loss of retiree health coverage.
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This article written by Cheryl Clark (@CherClarHealth) for MedPage Today, “Medicare Advantage Enrollees Discover Dirty Little Secret,” explains that after enrolling in an MA plan, if that member becomes ill or dissatisfied with his or her providers or service, it may be impossible to get out because insurers will want to scrutinize your medical history.
Another Medicare story angle to consider
When covering Medicare open enrollment, another angle to pursue is the experience that Americans in rural areas have had. In March, researchers reported in Health Affairs that in rural areas, MA members may be unable to get care because their plans have limited benefits and restrictive networks of hospitals and doctors. Such barriers to care may cause about 10.5% of MA enrollees to switch to traditional Medicare, more than double the 5% rate of switching among nonrural enrollees, the researchers found. “The differential was even greater among rural enrollees who were high cost or high need and dissatisfaction with access to care access was strongly associated with switching from MA to traditional Medicare among rural enrollees,” they wrote.
In August, Lieberman covered this story in an article for the Center for Health Journalism: “Massive changes are afoot in Medicare, and the media keeps missing the story.” In this article, Lieberman explained that the government has overpaid MA plans to encourage their growth. “Plans have been able to get more money by overstating the severity of their beneficiaries’ illnesses,” she wrote. Overstating the severity of illness among MA members is part of the perverse business model behind MA plans that Berwick and Gilfallin noted.
Must-reads for reporters covering Medicare and MA
In September, two former executives at the Center for Medicare, Donald M. Berwick, M.D., and Richard Gilfillan, M.D., wrote a pair of articles for the Health Affairs blog that are must-reads for anyone covering Medicare and MA:
More resources for covering MA and Medigap plans
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The State Health Insurance Assistance Programs (SHIPs) are one of the best sources of unbiased information on Medicare, MA, Medigap and other health insurance for seniors. SHIP volunteers operate in every state. For information from SHIP on Medigap plans, see this blog post on Medigap policies published in October.
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The Medicare Rights Center is a national, nonprofit consumer-service organization working to ensure access to affordable health care for older adults and people with disabilities.
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The Center for Medicare Advocacy is a national nonprofit law organization seeking to advance access to comprehensive Medicare coverage, health equity, and quality health care for the elderly and people with disabilities, particularly those with long-term, chronic conditions.
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The National Committee to Preserve Medicare and Social Security is a membership organization that seeks to protect, preserve, promote, and ensure the financial security, health, and wellbeing of current and future generations of maturing Americans.
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Kaiser Family Foundation reports are an excellent source of unbiased research on Medicare, MA, Medigap and other health insurance coverage for seniors. See these reports:
–Medicare Advantage 2022 Spotlight: First Look
–Seven in Ten Medicare Beneficiaries Did Not Compare Plans During Past Open Enrollment Period
–Medicare Part D: A First Look at Medicare Prescription Drug Plans in 2022
- For the calendar year 2022, the Center for Medicare and Medicaid Services will use the standards, limits and policies described in a memo titled “Final Contract Year 2021 Part C Benefits Review and Evaluation” issued April 8, 2020.
