Understanding Changes to Medicare Advantage Plans in 2018
If you are one of the 30 percent of Medicare enrollees who chose Plan C (Medicare Advantage) coverage rather than Original Medicare, there may be changes affecting your coverage or the costs you pay—you’re only are given a limited amount of time by Medicare to change your insurance coverage.
When Can You Switch Your Medicare Advantage Plan?
Most Medicare enrollees are limited to switching plans (or switching from Medicare Advantage to Original Medicare) during Medicare’s annual enrollment period. This period in 2017 began on October 15th and ends on December 7th. The foremost exceptions are if your insurance company is no longer offering your existing plan in 2018, or the Centers for Medicare and Medicaid Services (CMS) ended the Medicare Advantage contract with the private insurer offering your plan.
To assess if your health plan will still meet your needs in 2018—or if it is time to consider a different plan—the best way to begin is to compare your old policy to the one that will be effective as of January 1, 2018.
Three Most Common Changes Annually to Medicare Advantage Plans
The Motley Fool website describes the most common Medicare Advantage plan changes each year as the following:
- Prescription drug formularies (list of covered medication and charges for each medication);
- Cost-sharing (the amount that the insurer pays toward medical expenses incurred);
- Premiums (how much the enrollee pays for the insurance each month)
Loss of Providers in Your Medicare Advantage Network – Your Options
Your specialist physician (e.g., cardiologist) may no longer participate in your Medicare Advantage plan’s network. As long as you are willing to pay a higher co-insurance for utilizing an “out-of-network” physician, you may not have to change to a different “in-network” specialist. However, it all depends upon whether your Medicare Advantage plan policy includes the option of utilizing “out-of-network” providers. Indeed, most private insurers are limiting coverage only to “in-network” hospitals and providers as of 2018.
In general, private insurers are offering narrowed networks as a way to lower premium costs while maintaining revenue level, according to a report by the University of Pennsylvania’s Leonard Davis Institute of Health Economics and Robert Wood Johnson Foundation).
If your Medicare Advantage plan has dropped your preferred specialist from its network, it may make sense to switch to Original Medicare during open enrollment and purchase a private Medicare Supplemental Insurance (MSI)—MediGap—policy to cover the co-insurance cost. (Original Medicare expenditure may be higher than your previous “out-of-pocket” costs under Medicare Advantage, since Medicare’s Part B only covers 80 percent of your cost!)
The Impact of Your Address to Medicare Advantage Plan Availability
Medicare Advantage enrollees residing in rural areas may discover that their current plan will disappear in 2018, and no other insurance company is offering a Medicare Advantage Plan in their region.
According to a recent report from the Kaiser Family Foundation (KFF), 147 counties across 14 states have no Medicare Advantage insurer at all. This KFF report also noted that the average Medicare Advantage enrollee in 2017 was only able to choose among 19 such health plans (offered by a total of only six insurance companies), and the choices are likely to be even more limited in 2018.
Medicare Advantage Plans’ Drug Formularies are Changing
The emergence of novel drug treatments that target a patient’s own genes is exponentially increasing private insurers’ drug coverage costs. Yet another emerging—and costly— pharmaceutical intervention is the utilization of a person’s own T-cells (part of the immune system) to create individually-tailored interventions. Such patient-involved “drug” treatments can only be created by specialized pharmacies (as opposed to standard drug manufacturing).
Consequently, insurers are trying to curtail their expenditures by limiting coverage of expensive medications. Meanwhile, 52 percent of all Medicare Advantage plan enrollees in 2017 had plans with “out-of-pocket” drug expenditure limits exceeding $5,000—so enrollees with rare conditions (e.g., multiple sclerosis), “difficult-to-treat” disorders, and/or cancer are increasingly bearing more of the cost of their drugs!
In terms of patient choice of drugs, private insurance plans are trending toward not covering new brand-name medications and novel drug treatments, while also requiring a higher co-pay per drug of their enrollees.
Changes in Medicare Payment Structure
Medicare has been shifting increasingly from a “pay for service” model to a “pay for performance” model in order to decrease federal costs and reduce double-billing for services. Rather than pay a provider (e.g., hospital or doctor) for each individual service performed, the trend over the past several years by Medicare—as well as Medicaid—has been toward establishing coordinated care through a Patient-Centered Medical Home (PCMH).
The result of this Medicare-fostered trend toward offering varied types of medical services under one roof is that much consolidation is taking place among solo and small group practice providers in order to create patient care networks. In turn, this has caused particular anxiety for solo physician practices (who have been required to alter their billing practices), and a significant number have withdrawn from participating in Medicare. According to an article by the National Center for Policy Analysis, one out of every five physicians is rejecting new Medicare patients—which means switching to a new physician for an Original Medicare or Medicare Advantage enrollee is becoming more difficult.
Why Attend Your Medicare Advantage Plan’s Member Meetings
You may have recently received printed material from your Medicare Advantage plan describing your 2018 coverage, and also may have been invited to attend a meeting (presentation) explaining the plan’s coverage in 2018. If invited to such a meeting, our advice is to attend it. You may have an opportunity to ask questions, and learn new information through hearing answers to questions posed by other attendees.
What is SHIP?
Another option for assistance is to contact your State Health Insurance Assistance Program (SHIP). This advisory service can help guide you through your Medicare options to determine the one that is best for your financial and health needs. SHIPs are funded jointly by states and the federal CMS.
According to the Senior Resources for Professionals and Consumers’ website, the following are some points to consider:
- Some states call their SHIP by a different name (but you can learn that name and that SHIP’s phone number via the federal Medicare.gov website).
- If you are phoning from “out-of-state”, many of the “toll-free” phone numbers are only set up for “in-state” dialing (so you will need to use the local phone number for dialing).
- SHIP counseling is free of charge.
Since SHIP funding has been entirely eliminated in the budget plan for 2018 proposed by the Trump Administration to Congress, the future of SHIP is currently unknown.
Conclusion – Know Your Plan!
Staying current about your health insurance coverage is necessary to wisely manage your healthcare costs. Therefore, it makes good financial sense to take the time to understand your policy (and your options) before you need expensive medical care!