The Medicare Annual Coordinated Election Period (AEP) – the period during which individuals with Medicare can make coverage choices for the coming year – lasts until December 7th. During this time, people can enroll in, switch, or get out of Medicare Advantage (MA) and Part D prescription drug plans. They can also retain, or leave an MA plan, and enroll in traditional Medicare.
Medicare beneficiaries with MA and Part D plans are advised to compare plans and explore their options because plan benefits, coverage and cost-sharing change on an annual basis. Just because a given plan works well for an individual and covers all health care needs this year is no guarantee that it will do so next year.
In 2021, individuals will have an average of 33 Medicare Advantage plans and 30 Part D stand-alone prescription drug plans (PDPs) from which to choose, according to the Kaiser Family Foundation. This plethora of plan choices is often touted as the market doing what it does best – providing a wide range of coverage options, theoretically offering each individual the opportunity to search for and select their ideal choices based upon their individual circumstances.
As discussed below, however, studies continue to suggest that comparatively few people actually shop around for plans, even when doing so is in their best interest. Further, in a system that is based on and promotes “free choice,” such choices are often limited or skewed based on inherent flaws in the system. The fact that most people do not use the system in the manner in which it was intended, coupled with these inherent flaws, calls into question whether this market-based approach to Medicare coverage is best at meeting the needs of Medicare beneficiaries.
Most People Don’t Compare and Choose Coverage Options – Even If They Would Be Better Off Doing So
As noted in a recent New York Times article by Mark Miller (11/13/2020), most people do not annually review or compare their Medicare coverage options. Citing a Kaiser Family Foundation report, the article notes:
“[t]he study, based on Medicare’s own enrollee survey data, found that 57 percent didn’t review or compare their coverage options annually, including 46 percent who “never” or “rarely” revisited their plans. Strikingly, two-thirds of beneficiaries 85 or older don’t review their coverage annually, and up to 33 percent of this age group say they never do. People in poor health, or with low income or education levels, are also much less likely to shop.”
Further, the Times article notes that,
“[t]he Kaiser study found that 44 percent of enrollees had never visited the Medicare website, with another 18 percent reporting that they did not have access to the internet or had no one to go online for them. Only half reported that they had reviewed Medicare & You. Just 28 percent have ever called the Medicare help line (800-MEDICARE) for information; the rest have never called or were not even aware the line exists.”
Often, individuals would be better off with respect to coverage and cost if they actively shopped around for different plans, but some people assume they can’t find a more affordable or better option. According to a different Kaiser Family Foundation study, only about 10% of people voluntarily change Part D plans annually. However, as the Times article notes, the assumption that there aren’t better options
“can be very wrong. In a review of the 10 most heavily enrolled Part D plans for next year, Avalere Health found several with average premiums jumping by double-digit percentages, with others holding steady or dropping a bit. Kaiser calculates that eight out of 10 enrollees in stand-alone Part D plans will pay higher premiums next year in their current plans.”
The Concept of “Choice” is Promoted When Initially Searching for a Plan, But Choice Remains Elusive Once Individuals are Actually Enrolled
On its face, the Medicare program offers its beneficiaries a wide array of choices about how they would like to access their coverage. However, as discussed in a previous Center for Medicare Advocacy Alert “The Myth of ‘Choice’ in Private Insurance, Including Medicare Advantage” (March 5, 2020), choices are often not as “free” as they might seem.
As discussed below, while people can get in and out of a Medicare Advantage plan on an annual basis, most people have limited opportunities to purchase a Medigap plan. For those who choose to enroll in an MA plan, while there are many plan options from which to choose, choice is getting more complex, not less, due to recent policy changes that, among other things, allow plans to target supplemental benefits to some, but not all, of their enrollees.
Further, not all people who are in an MA plan enroll by choice. For example, in 2019, 1 in 5 MA enrollees (20%) were in a group plan, which are largely sponsored by unions and employers that contract with an insurer to provide benefits to their Medicare-eligible retirees. For many retirees with such coverage, an MA plan is their only option if they wish to retain some type of retiree coverage. In addition, many individuals with some form of retiree coverage are in danger of losing such coverage if they enroll in another MA or Part D plan.
As discussed in our previous Alert about “choice”, once someone is enrolled in an MA plan, much decision-making is taken away regarding who you see and what services you can get – instead of being patient-directed, it is the plan that makes the decisions.
There Remain Unequal Rights to Choose Coverage Options in Medicare – Namely Between Medicare Advantage and Medigap Plans
If the Medicare program was truly based on free choice among all coverage options, Medicare beneficiaries would be able to choose among every option, every year. But while every year people are free to enroll in an MA plan, there are limitations on rights to purchase a Medigap policy, and most people are not able to do so after the 6 month period following initial enrollment in Part B.
In a recent Wall Street Journal article (11/13/20), reporter Anne Tergesen chronicled her struggle to help her father (who is well past age 65) to choose his best Medicare coverage option for 2021. Tergesen notes:
Each of the two paths – an all-in-one Medicare Advantage plan or traditional Medicare plus Medigap and Part D – has downsides.
Medigap plans generally charge higher premiums than Medicare Advantage plans, some of which go as low as zero. And in many states, if you failed to sign up for Medigap within six months of enrolling in Medicare, insurers can charge you more or even deny coverage.
But Medicare Advantage can expose patients, especially those in poor health, to higher out-of-pocket expenses.
Because of where he lives, Tergesen’s father has coverage options that are not available to the vast majority of Medicare beneficiaries. He lives in one of four states that allow continuous or annual enrollment rights to purchase a Medigap plan.
Federal law requires Medigap “guaranteed issue” protections for people age 65 and older only during the first six months of their Medicare Part B enrollment and certain other limited situations, including during a “trial” Medicare Advantage enrollment period. Beneficiaries who miss these windows of opportunity may not be able to purchase a Medigap policy later in life if their needs or priorities change. Beneficiaries under age 65 with disabilities who qualify for Medicare have no guaranteed issue at all. (Individual states may offer varying degrees of consumer protection, but many do not).
Because Tergesen’s father had an option to choose a Medigap policy and compare it to Medicare Advantage, he truly had more “choice.” She writes:
“Our decision: For my dad, the choice is clear.
At $300 a month for Part D drug coverage, plus $270 for Medigap, traditional Medicare is less costly than the cheapest Medicare Advantage plan from the insurer his doctors accept.
But the numbers can change annually. So, next fall, we’ll do it all again.”
Several Means of Comparing Medicare Coverage Options Are Flawed
In addition to the growing complexity of the Medicare program, which makes comparing coverage options more difficult, and unequal rights to choose coverage options, there are other barriers in the way to individuals exercising a right to free choice among coverage options. This includes the Medicare program’s departure from a neutral presentation of options, to flaws in comparison tools, to the questionable utility of plan quality ratings.
- CMS Steering Towards MA Plans – People who do choose to explore their coverage options are doing so in an environment in which the primary source of Medicare information – the Medicare program itself – is not providing neutral, objective information about such options. As discussed in several previous Alerts (see, e.g., here, here, here and here), since Fall 2017, the Center has expressed concerns about bias towards Medicare Advantage in CMS materials, including outreach and enrollment materials, email campaigns and the 2018, 2019 and 2020 Medicare & You handbooks. On September 18, 2020, the Center for Medicare Advocacy released an Issue Brief titled “Medicare & You 2021 – An Assessment of Bias in Favor of Medicare Advantage” which provides an in-depth analysis of the new handbook and the ways in which it treats Medicare coverage options in a way that is not balanced or neutral, as it should be. As long as the Medicare program promotes one option, Medicare Advantage over traditional Medicare, and does not provide completely accurate information about such options, true “choice” is compromised.
- Medicare Plan Finder – as discussed in previous CMA Alerts, in 2019 CMS rolled out an updated Medicare Plan Finder (MPF). There were a number of problems, ranging from the timing of the roll-out, functionality, and errors in information on the website. As the Center noted at the time, including this previous Alert, CMS publicly downplayed problems that led many individuals to make coverage decisions based on incomplete or inaccurate information. Diminishing the existence of problems, along with inadequate promotion of possible redress (such as special enrollment periods), did the public a disservice.
Since last year’s fall enrollment period, CMS has tried to address some of these problems. However, on October 22, 2020, the Center released an Alert concerning emerging Plan Finder problems early in the current AEP. These problems included incomplete information about drug coverage and Low Income Subsidy (LIS) status so problematic that it led several state SHIP programs to advise their clients to wait until these problems were resolved before enrolling in Part D plans. While CMS has not publicly reported about or acknowledged these issues, it has informed partner organizations that these problems have since been resolved. It undermines confidence in the platform if CMS does not publicly acknowledge problems, including how and when such problems are addressed.
- Flawed Quality Star Ratings – As noted by CMS in a press release touting MA and Part D star ratings (Oct. 8, 2020), “[t]he Star Ratings system helps Medicare beneficiaries, their families, and their caregivers compare the quality of Medicare health and drug plans. Medicare health and drug plans are rated on a one-to-five scale, with one star representing poor performance and five stars representing excellent performance.” CMS states that “Medicare beneficiaries will continue to have access to high-quality Medicare Advantage and Part D prescription drug plans in 2021. According to the latest data, quality ratings of Medicare Advantage and Medicare Part D drug plans remain strong.”
In theory, a rating system that helps measure plan performance could help individuals sort through an avalanche of plan advertising that aims to promote and distinguish myriad plan options for prospective buyers. According to the independent Medicare Payment Advisory Commission (MedPAC), however, there are concerns about the quality of the ratings themselves.
In a summary of a March 2020 report to Congress, MedPAC states that it “continues to have concerns with the MA star rating system, which serves as the basis for plan quality bonuses and public reporting of plan quality. MA star ratings continue to be determined at the contract level. Because contracts can cover wide (and discontiguous) geographic areas and quality results are often determined based on only a small sample of beneficiary medical records, Medicare and beneficiaries lack important information about the quality of care of MA plans in their market. As a result, the Commission can no longer provide an accurate description of the quality of care in MA” [emphasis added].
Most Medicare beneficiaries do not use the market-based system of Medicare Advantage and Part D plan selection as intended. Further, there are flaws both inherent and manufactured in the system that limit true and equal choice between coverage options. If policymakers want to provide Medicare beneficiaries with true choice in accessing Medicare coverage, they will act to preserve and strengthen the traditional Medicare program, at the very least by leveling the playing field between traditional Medicare and private MA plans. This would include expanding federal rights to purchase a Medigap policy – which would be a critical first step towards providing equal access to Medicare coverage options. Without such reforms, the concept of “choice” in Medicare will continue to become more of a myth.
November 19, 2020 – D. Lipschutz