Seniors Favor Advantage Plans; Beware of Tradeoffs: Dallas Morning News 11.9.2021

This is the season when more
than 67 million Americans can
choose their Medicare plans for next
year, and if you’re of a certain age,
your mailbox may be running over
with offers and promotions.
Zero premiums, zero deductibles
for in-network care, allowances for
prescription glasses and hearing
aids, and maybe a fitness membership.
Low monthly costs and extra
benefits are commonly offered
through Medicare Advantage, the
private plan alternative to traditional Medicare. While there’s a major
tradeoff — a limited provider network of local doctors and hospitals
— Advantage plans are rapidly adding customers and gaining market
share.
Over 26 million people nationwide chose Advantage plans this
year, more than twice as many as a
decade ago, according to the Kaiser
Family Foundation. In the same
time, Advantage plans’ market share
grew from 25% to 42%, and Advantage is projected to have more customers than traditional Medicare by
2030.
In Dallas County, nearly 45% of
Medicare beneficiaries — about
146,000 older residents — enrolled
in Advantage plans this year, Kaiser
reported. In Tarrant County, the
penetration is nearly half, and in El
Paso, it’s over 63%.
Why are these plans gaining such
a following?
“It definitely seems to be a combination of factors — zero premiums,
extra benefits and all the marketing,”
said Meredith Freed, a policy analyst
with Kaiser Family Foundation’s
program on Medicare. “And a lotta
people are coming from employer
coverage with an HMO or PPO. So
there’s some familiarity with that
kind of system.”
Open enrollment for next year’s
Medicare coverage started last
month and continues through Dec.
7. Nationwide, over 3,800 plans are
available, the highest number ever,
Kaiser said. Texas added 41 Advantage plans for 2022, the most of any
state.
In Dallas County, those over age
65 can choose from 61 Advantage
plans for next year.
“We wonder if there’s an inflection point where there’s almost too
many plan options,” Freed said.
Especially when most people
don’t regularly compare Medicare
offers or review their existing coverage. Kaiser found that just 43% of
beneficiaries reviewed coverage every year, and the numbers were lower for those in poor health and at older ages.
One potential explanation:
About a third of Medicare beneficiaries said they had difficulty understanding the programs.
But it’s risky to not evaluate
the plans, especially Advantage
offers, because coverage changes regularly. Prescriptions
come in and out of the formulary, for example, and your favorite doctors and facilities can
leave the network — resulting
in a scramble for new providers
or the prospect of out-of-network charges.
“It’s analogous to sign up for
a 401(k) plan and never change
your investments for 40 years,”
said Tom Murphy, a longtime
certified financial planner in
North Dallas. “That can be
costly, but people ignore it because they don’t understand it,
andit’s outta sight, outtamind.”
Murphy has clients in both
Advantage plans and traditional Medicare. In general, those
who were comfortable with
HMOs at work, including getting referrals from their primary care doctor, are usually comfortable with Advantage plans.
“They’re used to having a
gatekeeper and a limited list of
doctors and facilities they can
go to,” Murphy said. “And they
plan to retire in the same
home. In many cases, they can
see the same doctors in the
same facilities, so for them,
there’s no real change.”
Advantage plans usually
have lower premiums, coverage for prescriptions and other
benefits, including vision and
dental. And one Advantage
plan covers everything, so that
can be less complicated than
buying a separate Medicare
supplement and prescription
policy, he said.
So why not switch? Many
clients expect to move after retirement or live elsewhere for
part of the year, perhaps near
their grown children. They
want to be able to use doctors
and hospitals wherever they
are, and only traditional Medicare has that flexibility.
Murphy also asks clients to
consider the possibility of having a serious illness and wanting to visit a top-notch facility
beyond Dallas. He said local
Advantage plans wouldn’t cover care at the University of Texas MD Anderson Cancer Center, for example.
“Clients say, ‘Oh, I never
thought of that,’ ” Murphy said.
“They don’t want to worry
about what’s in-network or not.
But many don’t even know
that’s an issue.”
Advantage plans have been
profitable forinsurers, generating higher monthly margins
per member than other sectors,
including the individual market, group market and Medicaid managed care. In 2020, the
per member margin in Advantage plans rose 24%, according
to Kaiser.
Advantage customers can
switch back to Medicare during open enrollment. But they
may be unable to get a supplemental Medigap policy, which
helps cover deductibles and
protects against catastrophic
expenses.
Medigap supplements are
available to everyone, regardless of health, when they first
sign up for Medicare. But if
they apply for a gap policy years
later, insurers can reject them
because of pre-exisiting conditions, such as having cancer or
diabetes.
“Some carriers are a little
more lenient than others,” said
JoAnn Charron, founder and
president of the insurance
agency, Benefits Dallas Inc.
Her firm offers a full range
of Advantage plans as well as
Medicare supplements and
prescription options. But 80%
of her clients choose traditional
Medicare and a gap policy.
“The biggest reason is
choice,” Charron said. “Most of
my clients have somebody at
UT Southwestern, at Baylor, at
Methodist. They have doctors
scattered all around, and they
want to stay with them.”
Twitter: @mitchschnurman

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