Short Takes On News & Events

Do Seniors Have Too Many Medicare Plans To Choose From?

By Phil Galewitz

May 14th, 2014, 5:00 AM

Most seniors face a dizzying array of options each year when it comes time to choose a Medicare health or prescription drug plan. Beneficiaries can select from an average of 18 health plans and 31 prescription drug plans. In South Florida, they have 88 plan choices altogether.

While choice may sound like a good thing, many seniors say they find it difficult to compare plans. As  a result, they often stick with the same plan even if it is not best suited to them, according to a new report from the Kaiser Family Foundation based on conversations with beneficiaries in Memphis, Tennessee; Tampa, Florida; Baltimore; and Seattle. (Kaiser Health News is an editorially independent program of the foundation.)

Many seniors said they did not want to switch plans because the process was so frustrating, the report said. That can cost them money because companies change prices and benefits almost every year.

At a briefing on the report Tuesday, Barry Schwartz, a psychology professor at Swarthmore College and author of the book, “Paradox of Choice,” explained that older people tend to make choices that are “good enough,” while younger people often search for the “perfect” choice.

But Judith Stein, executive director of the Center for Medicare Advocacy, a consumer advocacy group, said that Medicare beneficiaries sometimes find that a health plan that is “good enough” when they are healthy does not meet their needs when they are sick. That’s because a plan may not include coverage for the hospital or doctor they want, or may charge too much for the drug their doctor recommends.

Even with so many choices, most seniors flock to a small number of plans, said Joshua Raskin, senior analyst for investment firm Barclays Capital. He said plans with the most market share, including those run by insurer giants, Humana and UnitedHealthcare, have grown the fastest in recent years.

To give seniors tools to help them choose the best plans, the federal government several years ago began rating them based on factors such as access to doctors and customer service. But seniors seem to pay little attention. In recent years, the best-rated health plans, those with five stars, have increased enrollment at the slowest pace, compared to 8 percent in the market overall, Raskin said.

He said the fastest growing plans are those with three stars — which have seen 12 percent enrollment growth,

He said the fastest-growing plans have been those with just three stars – many of which have seen 12 percent enrollment growth. He added that price,  particularly monthly premiums, often drive seniors’ choices.

But one reason why seniors have not flocked to the best-rated plans may be because there are so few of them. For 2014, the Centers for Medicare and Medicaid Services awarded five-star ratings to 14 health plans and 5 prescription drug plans.

About 75 percent of Medicare’s 54 million beneficiaries are enrolled in a private health or drug plan. The rest get traditional Medicare.

Raskin said because health insurers know seniors are most likely to pick plans based on price, they are hesitant to charge a monthly premium if they have not had one, or to implement a major rate hike.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

12 Responses to “Do Seniors Have Too Many Medicare Plans To Choose From?”

  1. Navigating the Medicare maze can be a daunting task, but help is available. Every state has a State Health Insurance Assistance Program or SHIP. Funded by the Centers for Medicare and Medicaid Services, SHIPs provide free one-on-one, personalized counseling to help people make informed decisions about Medicare and other health care issues. Contact information for your state’s SHIP can be found at: http://www.medicare.gov/contacts/search-results.aspx?cacheKill=9875.

  2. Assuming, as I do, that SHIP staff will tell beneficiary’s the truth, their attempts to help often add to the confusion and frustration, because it runs counter the sales pitches they have been given by Medicare Advantage plans. Those plans often sound great, at least to the healthy, but as one of the first 100 providers to the program, and a veteran beneficiary, I can tell you they cost much, much more for anyone who has the slightest need for health acre while enrolled. A comparison I made one year while I had all my records out for tax reasons showed that a major Advantage plan would have cost well over $6,000 more than standard Medicare and a good Medigap policy. I think it is ridiculous that such plans are actually subsidized, much less allowed to be sold by people acting like starving used car salesmen, and that’s an insult to the car selling folks!

  3. Anne Nilsen says:

    I agree with Michael. I would add that Medicare Advantage plans also cost the taxpayer much more money than traditional Medicare (in addition to the beneficiary).

  4. Donald Broder says:

    I agree but would go further. As a 76-year-old retired physician I am absolutely certain I would be no better off at selecting a plan than my retired non-medical age cohort colleagues. Remember that these plans, no matter the advertising, are put together by insurance companies whose sole purpose is to make money for their share owners.

    We will continue to be stuck in this Rube Goldberg mess until we as a people come to the understanding that we’d be much better off, all of us: patients, providers, everyone, if we accepted that health care (note: health CARE not health insurance) ought to be a human right of every last one of us.

    If we did that, we’d understand that only a single-payer system such as in every other industrialized country in the world, would fill our needs.

    We pay more and get less than everyone else in the world. Our system costs more than anywhere else. The only method we’ve figured out to control costs is to control access. All of the hullabaloo about the ACA (Obamacare) while it will make care available to many millions that have never had it, it will still leave over 30 million uninsured. We must do better.

    It makes no more sense that geezers like me should have to struggle to figure out which of many well-designed (and well disguised) plans is best than it does that any child in this country should lack well baby care or that any woman should lack prenatal care. You can easily add to the list.

  5. I think these comments are missing a major consideration. How can someone say that there claim cost $6000+ one year and not mention the cost of a Medicare supplement and Part D. I’m a 68 year old insurance agent and have an Advantage Plan with a zero premium. Over the last 3 years I have saved over $7500 in Medicare Supplement and Part D premiums. My plan has a maximum out of pocket of $3400/year.
    Fact: As you get older you Medicare supplement premiums go up too. A lot of Seniors cannot move to a cheaper plan unless they can pass underwriting.
    But the real reason I have my MAPD is managed care. My PCP knows everything about me and I have some serious conditions controlled. All the specialist report back to my primary care doctor. My health is managed by experts who talk to each other.
    Having sold Medicare Supplement plan since the beginning my biggest problem with them (beside those annual rate hikes) is you can go to any doctor and as many as you like. I’ve been in home where 12 or more Rx were being taken and the client doesn’t know what they are for or why they take so many.
    Yes many years ago I too hated HMO Advantage. CMS has done a wonderful job fixing them. They need to take on the Medicare Supplement Carriers for guaranteed issue so when those premiums get higher than the Senior can afford- they can move. Better yet- they need to enroll in Managed Care- they will live longer

  6. Scott Stiverson says:

    I am a 49 year-old Insurance Agent and would like to submit my humble opinion. While I can appreciate the overall sentiment of people against insurance companies and all the confusing choices out there, it is important to keep these thoughts in mind. Situations and budget dictate the best choice for each individual.
    Examples:
    1) A Zero Cost Medicare Advantage Plan that includes Part D IS a better choice than JUST having Original Medicare without a Medigap Plan. Why? You still have to purchase a Part D Rx Plan and Original Medicare does not have a Out of Pocket Limit, whereas a MAPD is going to have both included. For someone who is on a fixed budget and cannot afford a Medicare Supplement (Medigap) Plan, this is a very good alternative.
    2) If you can afford a Medigap Plan and Part D plan, that is the best choice, especially if you are using a lot of services and going to the doctor every week. But some of my healthier clients see a Med Supp and Part D as a waste of money and prefer to go with a Zero or low cost MAPD. Others simply can’t afford the $200+ premiums for the Supp and Part D.
    In Summary, if you can afford to commit to the premium of your Med Supp and Part D plans, you are golden. If not, it is up to me to educate my clients to help them make the right decision for them at that time. And that is my goal.

  7. Elizabeth Rosenthal says:

    I am a 71 year old mostly retired physician and one of my volunteer jobs is as a volunteer for Medicare Rights. This is a non-profit group that helps those with Medicare choose a plan and we give private counseling in local libraries here in NY’s Westchester county. It is free for those that come to the library. We also give brief “Medicare minutes” at many senior centers in the area. Medicare is much more complicated and expensive that it could and should be! There are too many choices and even after taking a 5 day course on this, there is still much that can confuse me. It is really hard to figure out which plan is the best for each client. We need to get rid of the private insurance parts of Medicare and have it be much simpler and more efficient. I don’t blame people for being confused and making the wrong choice. We should all get the health care we NEED and not just the health care we can AFFORD!

  8. When I turned 65 I was inundated with mailings from Advantage Programs. With a background in the quantitative sciences and decades of experience, I tried not only to understand the plan options, but also to compare one to another. Alas, I was unable to do so. More clarity in the marketing materials is necessary.

  9. Donald Wechsler says:

    Many seniors I counsel feel, “if it ain’t broke, don’t fix it.” So, I demonstrate Medicare’s Plan Finder ( https://www.medicare.gov/find-a-plan/questions/home.aspx )
    using their medications, to give them an idea of their situation and alternatives. I myself would not tackle the comparative economics of Part D plans or MAPDs without a tool like Plan Finder. The mix of premiums, copayments, and deductibles is just too taxing.

    For Part D, the tool seems straightforward for PDP number-crunching. But, the tool’s usefulness is limited when comparing MAPDs. While Plan Finder uses averages to estimate medical services, most seniors face individual situations. And other issues such as provider networks come into play.

    Overall star ratings are not always sufficient. A plan’s overall rating might be lower because of particular improvement areas of less interest to an individual. Medicare.gov reveals the details behind each plan’s ratings. In the end, it’s an individual decision.

  10. Donald Wechsler says:

    Many seniors I counsel feel, “if it ain’t broke, don’t fix it.” So, I demonstrate Medicare’s Plan Finder
    ( https://www.medicare.gov/find-a-plan/questions/home.aspx )
    using their medications, to give them an idea of their situation and alternatives. I myself would not tackle the comparative economics of Part D plans or MAPDs without a tool like Plan Finder. The mix of premiums, copayments, and deductibles is just too taxing.

    For Part D, the tool seems straightforward for PDP number-crunching. But, the tool’s usefulness is limited when comparing MAPDs. While Plan Finder uses averages to estimate medical services, most seniors face individual situations. And other issues such as provider networks come into play.

    Overall star ratings are not always sufficient. A plan’s overall rating might be lower because of particular improvement areas of less interest to an individual. Medicare.gov reveals the details behind each plan’s ratings. In the end, it’s an individual decision.

  11. I agree with Scott Stiverson’s comments. Medicare Advantage certainly fills an important role but after that, a well informed insurance agent can be a real asset in matching the client’s needs and budget to the best Med Supplement carrier in their area.

    Let’s be clear: The Med Supplement plans are defined by the government. A Plan F is a Plan F regardless of which carrier you choose. But one carrier may be notorious for large prices increases, another for a liberal underwriting policy and each will have a different cost.

    It’s only the informed independent agent who works with these things every day, year after year who can provide the proper counseling for a client to help them make an informed choice. Is the agent influenced by the commission? I’m sure some are – but not those of us who realize that it’s only through providing good advice and good follow up that we can retain the loyalty of our customer base.

  12. Fred says:

    Choices, it’s the American way! I am an independent Agent for the last 3 to 4 years. The problem is not that there are too many chioces! The problem is that Brokerage as defined by the State of New York needs to take a firmer foothold and be held accountable to “represent the Medicare Beneficiary”. A standard questionere should be established that seekds to accomplish just that; ; to represent the needs of the Medicare Beneficaiary. I have taken that very serious. In the five boros there are over 35 medicare advantage plans. Some work through Medicaid as well and are called SNP plans. There are MLTC plans for beneficiaries that require nursing home care at home and are elibgle to receive this care at home. .One insurance company is not equipped to offer these and other unrelated services to the public. Brokerage on the other hand is. As an independent agent I need to have the knowledge (expertise)of the markets that provide the services needed which vary among beneficiaries. Brokerage is the GPS for the American Retiree and /or Disabled Worker in the absence of a union or employee sponsored health program. Brokerage must and is regulated but needs protection under the law from the big companies. Contracts must also be regulated to meet Medicare requirements . The beneficiary is MY CLENT, period.When I present a plan to a Client he becomes my CUSTOMER. I present clinically but responsibly. That client needs my expertise to narrow choices down. I present the (3) most desireable choices based on his professed and established needs. Compromise is sometimes necessary but it is and always should be his (hers) to make. Choices, is the American way and Brokerage is the American solution.

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