Many of the more than 300,000 Minnesotans who lose their Medicare health plans next year are finding that options for replacement coverage could require more or bigger co-payments when visiting a doctor.
The differences are particularly clear to consumers who are losing their Medicare Cost plans while also being steered to Medicare Advantage plans, which generally impose more fees for everything from ambulance rides to X-rays.
Insurers say the higher co-payments in general are balanced by lower monthly premiums with Advantage plans. Consumers can avoid the complexity with co-payments by opting for original Medicare plus a Medigap supplement, but they likely will find higher premiums as a result.
"There's always going to be trade-offs," said Kelli Jo Greiner, health policy analyst with the Minnesota Board on Aging. "This is what makes it so complicated."
The co-payment factor is one of many issues that Minnesotans are confronting as they decide how to replace Medicare Cost plans sold by the state's largest nonprofit health insurers.
A federal law is eliminating Cost plans across 66 counties in 2019, leaving consumers with a choice between original Medicare and newer Medicare Advantage plans. Across the country, about two-thirds of Medicare beneficiaries opt for original Medicare, while one-third opt for Advantage plans that are sold by private health insurance companies.
State officials are worried that people losing Cost plans will revert to original Medicare without buying Medigap and Part D coverage. That could spell financial trouble for those who rack up big medical bills, since original Medicare in many cases covers just 80 percent of medical costs and doesn't cover most drugs.
There are several key differences between original Medicare plus Medigap and Medicare Advantage coverage routes.
Original Medicare plus a supplement generally provides broader access to doctors and hospitals. Medicare Supplements, which are called Medigap plans, can be paired with Part D plans from any of more than two dozen companies that sell drug coverage, whereas enrollees in Advantage plans are limited to benefits offered by their medical insurer. The benefits with Medigap plans are standardized, whereas Advantage plan details can change from year to year. And Medigap plans don't use rules like "prior authorization" that control costs but can frustrate patients.
Medicare Advantage plans, meanwhile, often sell for a much lower monthly premium, including some zero-premium options. Low premiums create a savings opportunity for people who don't use much care. Additionally, the plans often include extra benefits that go beyond original Medicare, such as coverage for preventive care and discounts on dental, vision and hearing services. Some policymakers have promoted Advantage plans because they put health insurance companies at financial risk while grading them on quality — which they say provides incentives to efficiently manage care for quality.
Another difference is the co-payments, which can be structured as a flat fee per service or as a percentage of the service's cost. Medicare Advantage plans cap the total annual value of these out-of-pocket costs at anywhere from $3,000 to $6,700 for in-network services (and more for out-of-network care).
"That's part of the calculus," said David Lipschutz, senior policy attorney with the Center for Medicare Advocacy. "Do I want to pay more in monthly premium with more of an assurance that I won't pay more when I incur health costs? Or, do I want to go with a lower monthly premium knowing that if I do want to utilize health care services I might be on the hook?"
Tommy Stiles, 72, of Henning opted to go the Medigap route, even though the premium will be higher.
Stiles had been very satisfied with coverage from the most comprehensive Medicare Cost plan from Blue Cross and Blue Shield of Minnesota. Among other features, the plan asked him to pay $0 out-of-pocket for ambulance rides, physician visits, outpatient surgeries and X-rays.
So, Stiles said he was alarmed this fall when Blue Cross directed him to a Medicare Advantage plan that would force him to pay $5 to $20 for a physician visit, $50 per ambulance ride, $150 per outpatient surgery and 10 percent of X-ray costs. He's opted instead for a Medigap plan where the premium is about 10 percent higher.
"There's no surprises," Stiles said of the Medigap-style coverage.
Stiles is among the subset of Cost plan enrollees with prescription benefits in their coverage, and therefore are eligible for a process called "deeming" in which their current insurer automatically enrolls them in a new Medicare Advantage plan. The federal government says deeming can occur only if the total beneficiary cost with the new coverage doesn't exceed the old health plan's average cost by more than $36 per member per month.
Stiles is skeptical of the deeming process, because he says it looks like Blue Cross was steering him to a plan where he might pay a lot more in co-payments and coinsurance. For several years, Stiles has been going to the Mayo Clinic for treatment of prostate cancer, and during the time period he faced less than $5 in out-of-pocket costs.
The Advantage plan included a comparable premium and slightly lower annual cap than the Cost plan in terms of out-of-pocket costs, but it featured many more ways to incur those costs. "There's not room for $3,000 or $4,000 surprises in my budget," Stiles said.
Blue Cross defended the deeming process, saying the calculation factors not just co-payments but also premiums that often are lower plus the value of extra benefits. The insurer says it recognizes Medigap might be a better fit for some people, and encourages consumers to survey their options.
"For some of these members that do have high costs potentially tied back to them, it may be better for them to be in a Medigap plan because that way you can more simply budget knowing you're going to pay a premium, not potentially have out-of-pocket expenses," said Joel Stich, senior director for government markets at Blue Cross.
Minnesotans who are losing Medicare Cost plans have a one-time right to enroll in a Medigap policy without answering questions about their health history, which could block enrollment at a later date.
At the Minnesota Board on Aging, officials say the deeming process provides a public benefit by making sure consumers don't unwittingly revert to Medicare without supplemental coverage, which can protect them from huge medical bills. At the same time, the board encourages people to actively evaluate whether the plan they've been deemed into is the best choice.
On the Medigap side, consumer advisers say finding the best deal requires shopping among the many different insurers that sell Medicare Supplement policies and studying differences with Part D prescription drug plans.
The complexity of the decision facing so many Medicare beneficiaries this fall explains why average wait times are up at the state's Senior LinkAge Line, which provides free advice on Medicare options. The average wait time this year is more than 21 minutes, compared with more than 8 minutes in 2017.
"People are not happy that they're having to make these changes," said Greiner of the state's board on aging. "People were really satisfied with what they had."