Anxiety, frustration and hints of exasperation are all in the mix as more than a quarter-million Minnesota seniors face the prospect of selecting new Medicare health plans in the coming months.
An estimated 320,000 Minnesotans with Medicare Cost health plans must switch to a new policy because a federal law is eliminating the coverage next year across much of the state.
Starting this summer and continuing in recent weeks, insurers and the government have been sending a series of letters to beneficiaries about the transition. Marketing efforts by insurance companies have picked up as well, although full details about 2019 coverage options won’t be available until next month.
“That’s a large number of people to be making a change in one year,” said Gretchen Jacobson, a researcher with the California-based Kaiser Family Foundation who has studied what Medicare beneficiaries think about shopping for coverage. “Seniors told us that they found the process of comparing plans to be frustrating, confusing and overwhelming.”
Insurers, consumer advocates and government officials say they’re working to ease the pain.
Insurers can make detailed information about options for next year available on Oct. 1, when they will start pitching their products at hundreds of information sessions across the state. Minnesota’s Senior LinkAge Line, which offers help over the phone, is planning extended hours after Medicare open enrollment begins Oct. 15. In the seven-county metro area, a nonprofit called the Metropolitan Area Agency on Aging will offer one-on-one counseling at 50 locations plus information sessions across the Twin Cities.
Anxious for information
Jerry Maher, a volunteer insurance counselor with the agency on aging, said many seniors hungry for information are frustrated that it’s just not there yet. “They’re getting these letters, and most of them have received three by now — two from their insurer, and one from the government — and they’re confused,” Maher said.
Cost plans have been around for a long time in Minnesota. The policies are sold by only three insurers — Blue Cross and Blue Shield of Minnesota, HealthPartners and Medica — under the brands Platinum Blue, HealthPartners Freedom and Medica Prime Solution. What’s more, the Medicare Cost plans are sold alongside products from health insurers Humana and UCare that actually are Medicare Advantage (MA) plans, a somewhat different type of coverage.
The distinction between Cost and Advantage health plans is lost on most consumers, since in both cases enrollees opt to receive their Medicare benefits via private insurers. One of the key differences is how insurance companies that sell the different plans get paid by the government — a technical detail that helps explain the shift away from Cost plans.
With Medicare Advantage, insurers receive set per-member, per-month payments that put insurers at financial risk if patient expenses exceed expectations. Cost plans, as their name suggests, are paid based on their costs, with no set rate.
A federal law passed in 2003 created a competition requirement for Medicare Cost plans, which stipulated the plans could not be offered in service areas where there was significant competition from Medicare Advantage plans. Congress delayed implementation until a law passed in 2015 called for the rule to take effect in 2019.
A bipartisan move
The government’s push to “sunset” the Cost plans has spanned both Democratic and Republican administrations and hasn’t really been a partisan issue, said Sean Creighton, a vice president in the policy practice with Avalere, a health care consultancy in Washington, D.C. Roughly 20 million people are covered through Medicare Advantage plans, while only about 630,000 people had Cost plans in June — and most of those beneficiaries were Minnesotans.
“The government is not trying to take away benefits,” Creighton said. “What they are trying to do is simplify the administrative structure and have health plans take financial responsibility for managing the health care utilization of enrollees.”
In Minnesota, Cost plans will survive in 21 counties where they don’t face much competition from Medicare Advantage plans. That includes St. Louis County and much of the state’s northeast corner.
Cost plans will be eliminated for an estimated 320,000 people in 66 counties, including Hennepin, Ramsey and others in the Twin Cities metro.
For some, it’s automatic
Over the past few weeks, insurers have been sending letters to a subset of Cost plan enrollees in these counties, explaining how they’ll be automatically enrolled in a comparable Medicare Advantage plan unless they make a different choice. The government calls this process “deeming” — since the plans are deemed comparable — and state officials say up to 125,000 Minnesotans might be directed in this way toward new products from their current insurance company.
State officials advise consumers to make sure the new health plan is both affordable and provides access to their doctors, hospitals, medications and pharmacies.
“They need to make sure their provider is going to be in the network,” said Kelli Jo Greiner, health policy analyst with the Minnesota Board on Aging. “The Medicare Advantage plans usually have smaller provider networks than the Medicare Cost plans did.”
People being deemed into coverage are free to shop around for a better option during open enrollment. Shopping might be even more important for the estimated 200,000 people or so who aren’t being steered into a new health plan, and therefore must actively look for replacement coverage.
“If they don’t make a decision before Dec. 31, they will just have original Medicare Jan. 1 and they’ll have to pay all the cost-sharing, all the deductibles, all the coinsurance — they’ll have to pay that out-of-pocket,” Greiner said.
Medicare Advantage plans won’t be the only option for consumers.
Maher, the volunteer insurance counselor, said some might find a better fit if they stick with traditional Medicare and also purchase a Medicare supplemental policy, sometimes called a “Medigap” plan. The Cost plan transition creates a one-time chance, Maher added, for beneficiaries to buy Medigap coverage without being asked questions about their health status, which could block enrollment down the road.
Seniors this fall might find more health plan choices than in the past. Minnetonka-based UnitedHealthcare hopes to sell for the first time Medicare Advantage plans across nine counties in Minnesota next year, while a new joint venture between Allina Health System and national carrier Aetna hopes to sell Medicare Advantage plans in 12 counties.
Some aren’t thrilled with all this.
Carol Tauer, 85, of St. Paul, has had a Cost plan from HealthPartners for 20 years and likes how the policy gives her a broad choice of doctors.
“We weren’t even aware that it was coming, and we don’t even know why,” Tauer said. “What is it that changed?”
Steve Timmerman, 66, of Rosemount said he’s happy with his Blue Cross health plan, and worries that he won’t have much time to make a decision about new coverage.
“Of course we are frustrated, because when we originally signed up for our supplemental plan we thought all our decisionmaking would be over,” he said. “It is like starting from scratch.”