Older Americans say they feel trapped in Medicare Advantage plans

https://www.kpbs.org/news/news/living/2024/01/03/older-americans-say-they-feel-trapped-in-medicare-advantage-plans

Sarah Jane Tribble, 2024/01/03, KBPS

Abstract Enrollment in Medicare Advantage plans has grown substantially in the past few decades, enticing more than half of eligible people, primarily those 65 or older, with low premium costs and perks like dental and vision insurance. And as the private plans' share of the Medicare patient pie has ballooned to 30.8 million people, so too have concerns about the insurers' aggressive sales tactics and misleading coverage claims.

Medicare pays private insurers a fixed amount per Medicare Advantage enrollee and in many cases also pays out bonuses, which the insurers can use to provide supplemental benefits. Those extra benefits work as an incentive to get people to join the plan but that the plans then restrict the access to so many services and coverage for the bigger stuff. The problem is that once you get into Medicare Advantage, if you have a couple of chronic conditions and you want to leave Medicare Advantage, even if Medicare Advantage isn't meeting your needs, you might not have any ability to switch back to traditional Medicare.

Traditional Medicare can be too expensive for beneficiaries switching back from Medicare Advantage. In traditional Medicare, enrollees pay a monthly premium and, after reaching a deductible, in most cases are expected to pay 20% of the cost of each nonhospital service or item they use. And there is no limit on how much an enrollee may have to pay as part of that 20% coinsurance if they end up using a lot of care. To limit what they spend out-of-pocket, traditional Medicare enrollees typically sign up for supplemental insurance, such as employer coverage, or a private Medigap policy. If they are low income, Medicaid may provide that supplemental coverage.

But there's a catch: While beneficiaries who enrolled first in traditional Medicare are guaranteed to qualify for a Medigap policy without pricing based on their medical history, Medigap insurers can deny coverage to beneficiaries transferring from Medicare Advantage plans or can base their prices on medical underwriting. Only four states — Connecticut, Maine, Massachusetts and New York — prohibit insurers from denying a Medigap policy if the enrollee has preexisting conditions such as diabetes or heart disease.