Minnesota seniors are finding more choices and, in several instances, lower premiums as they survey options during Medicare open enrollment this fall.
Yet this year — like every year — there are an array of factors to also consider when deciding whether to make a change in coverage.
"Things change drastically from year to year in terms of the drugs that are covered, in terms of the health care providers that participate and in terms of the cost," says Kelli Jo Greiner, health care policy analyst with the Minnesota Board on Aging. "Go in, look at your current plan, look at other options. Because that way, you will ensure in January that you're going to have the best coverage for you."
Open enrollment runs through Dec. 7. Here's a look at some of the basics with Medicare — as well as some of the fine print for 2023.
- How many Minnesotans are on Medicare?
Original Medicare is the traditional health insurance program for people 65 and older as well as certain younger people with disabilities. The program is split into two primary components — Part A is federal hospital insurance while Part B is medical insurance for things like doctor visits.
There were nearly 1.1 million Medicare beneficiaries in Minnesota as of July. That includes about 486,000 on original Medicare, many of whom purchase "Medigap" supplemental coverage from private insurers for out-of-pocket hospital/medical costs. Medigap policies cannot cover prescription drugs.
Just over 600,000 state residents this summer were enrolled in Medicare Advantage plans from health insurance companies or another form of private coverage called Medicare Cost health plans. With Medicare Advantage, health insurers provide Part A and Part B benefits through a managed care health plan that puts an annual limit on out-of-pocket hospital/medical costs.
- What's happening with premiums for 2023?
Most people don't pay a premium for Medicare Part A. For Part B, the standard premium is declining 3% next year to $164.90 per month, an expense that's deducted from Social Security checks for most beneficiaries.
Seniors pay additional premiums for Medicare Advantage, Medicare Cost or Medigap coverage. The rate and direction of change in those premiums for next year depends on the policy and the health insurer. There's also variation in premium trends for stand-alone Part D plans — medication coverage that's sold by private health insurance companies.
- Aren't some premiums declining for Medicare Advantage and Part D coverage?
For the current open enrollment period, the Star Tribune reviewed premiums for 31 of the most popular Medicare Advantage, Cost and Part D plans in Minnesota and found that 12 of the plans will reduce premiums next year while another four are holding premiums steady. The largest Medicare Advantage plan is increasing rates by about 10%, while the largest Part D plan will be 29% less expensive.
Last year at this time, premiums were going down for five of these 31 insurance plans and holding steady for another 10.
- What about Medigap premiums?
It's also a mix. Blue Cross and Blue Shield of Minnesota is one of the state's largest Medigap carriers with current enrollment of about 154,000 people. A spokesman for the Eagan-based company said monthly rates are going up for two Medigap policies and down for two others.
The cost for a Medigap policy — also called Medicare Supplement plans — tends to increase each year, but this fall most premium increases are "pretty modest," said Joshua Haberman, an insurance agent with Alexander & Haberman in Bloomington.
- Why do health insurers seem so excited about selling Medicare Advantage plans?
The federal government is putting a lot of money into the coverage.
When seniors select Medicare Advantage, their premiums reflect only a portion of the total revenue for the insurance company. For 2023, a senior in Minnesota might pay anywhere from $0 to more than $2,500 in annual premiums for a Medicare Advantage plan.
The federal government, meanwhile, projects it will pay an additional $12,900 to $13,800 in average annual premiums per enrollee for the most common types of Medicare Advantage plans. Actual payment rates vary by insurer as well as geography.
- Should seniors be careful given all the Medicare marketing this time of year?
At Trellis, the area agency on aging for the Twin Cities metro, advisors say they get many calls from seniors frustrated by the sales push. It's illegal, the Arden Hills-based group says, for companies to cold call seniors to sell Medicare plans — seniors must first give consent to be contacted by a company.
Trellis is part of the statewide Senior LinkAge Line system, a help line for seniors. The group says callers in the metro are reporting more scam calls, texts, emails and paper mail. "A common one is ... scammers claiming to be from Medicare [and asking for] the beneficiary's Medicare number to send them a new Medicare number and card," Trellis said in a statement to the Star Tribune. "We remind callers that neither Medicare nor Social Security will ever call them." New Medicare cards are not issued unless a beneficiary is new to Medicare, Greiner said.
- Should people be cautious with "zero-premium" Medicare Advantage plans?
Be mindful of the tradeoffs. Insurance companies continue to offer more of these options with $0 in monthly costs. Medicare counselors at the Senior LinkAge Line say they're getting more calls this fall from people thinking about switching from higher-premium Medigap policies into lower-premium or no-premium Medicare Advantage plans.
"However, they don't realize that if they switch out of their Medigap it can be difficult to get their plan back again if they change their mind," Trellis officials said in a statement. "Although consumers pay $0 in premiums, they will pay higher copays for services at the doctor and hospital."
- Why can't some people get back into Medigap?
For seniors who want a policy, advisors say it's best to purchase Medigap coverage when enrolling in Part B. That typically happens during a limited period when a senior turns 65 or moves off job-based coverage (although there can be a few other special enrollment circumstances).
Seniors who try buying a Medigap policy at other times may be asked by insurers to complete a health questionnaire and could be denied coverage based on their answers.
"One of the most important decisions people make at 65 is: Do I buy a Medicare Supplement or not?" Haberman said. "Because if you don't do it then, I don't know when you're going to be able to do it later."
Trellis officials point out that while people with Medigap policies can switch to Medicare Advantage or make changes to a Part D plan during open enrollment, they don't qualify during the annual election period for an automatic enrollment into another Medigap plan.
- Aren't more people picking Medicare Advantage?
Yes. The monthly cost with Medicare Advantage typically is lower than the combined premium for a Medigap policy and a Part D plan. Those savings can offset higher out-of-pocket costs with Medicare Advantage when seniors go to the doctor or hospital, said Ron Bearman,an insurance agent in Minnetonka.
The key to making Medicare Advantage work at the lowest out-of-pocket cost is for seniors to make sure their doctors, hospitals and skilled-nursing care providers are in the health plan's network. They also need to look for a plan where their medications are included on the formulary and available at their favorite pharmacy, recognizing that coverage can change every year. Finally, seniors who travel should check the plan's network for out-of-state providers, says Tom Peterson of Twin City Underwriters in Roseville.
- What about out-of-pocket cost with Medigap versus Medicare Advantage?
Some Medigap plans virtually eliminate out-of-pocket costs for hospital and medical care, while others cover only a portion of the expenses without imposing an annual cap. Medigap policies do not cover any Medicare Part D prescription costs, which is why many in original Medicare also buy a stand-alone drug plan.
All Medicare Advantage plans cap out-of-pocket costs for medical and hospital care, but the dollar value of that cap can range from about $3,000 to $6,700 annually for in-network care. There can be additional out-of-pocket expenses if seniors use out-of-network care. Medicare Advantage plans typically include Part D coverage, which has its own out-of-pocket spending limits.
- What's better — original Medicare supplemented by Medigap plus a Part D plan, or Medicare Advantage that includes prescription coverage?
In September, the Kaiser Family Foundation published a review of 62 studies from recent years that looked at beneficiary experience, affordability, service utilization and quality in Medicare Advantage versus original Medicare.
"Most people in Medicare Advantage plans do say that they're satisfied with their coverage," said Jeannie Fuglesten Biniek, one of the researchers at the California-based foundation. "The same is also true for people in original Medicare. And so people generally who have Medicare — whether it's Medicare Advantage or original Medicare — are pretty satisfied and happy.
"When we reviewed the studies there were not a lot of differences between traditional Medicare and Medicare Advantage that were supported by strong evidence or replicated over multiple studies. So, it's not clear that one is better than the other."
- Can seniors get help with all this?
Information and help with sign-ups is available at the Medicare website or by calling 1-800-MEDICARE. In Minnesota, help via the SeniorLinkAge Line is available Monday to Friday 8 a.m. to 4:30 p.m. at 1-800-333-2433.
The Minnesota Board on Aging publishes an online book with complete information on all Medicare insurance options at http://mnhealthcarechoices.org/. Seniors can request to meet with a counselor in the metro for one-on-one assistance at https://trellisconnects.org/get-help/medicare/
