Early last year we wrote that Medicare Advantage plans were about to change, bringing policy-holders a wide range of new services and benefits. (We wrote about it on the Aging Options blog back in April 2018.) Since then we’ve seen other articles, not to mention an endless stream of glossy marketing materials, touting these new perks. The purpose, it seems clear, is to shift more people out of traditional Medicare and into the private-insurance MA plans. But are these new benefits and services a good deal – for the consumer as well as for Medicare – or not?
Medicare Advantage Changes Bring “New and Improved” Levels of Coverage
This 2018 article from the New York Times brought these changes to national attention, and we thought at the time that it did an excellent job of explaining what’s going on behind the scenes with the “new and improved” Medicare Advantage plans. Here at AgingOptions we continue to watch this evolving situation closely, because for now there appear to be more questions than there are answers; but from what we read in articles like the one in the New York Times, all this good news for MA policy-holders comes with a catch or two.
The New York Times article appeared July 20, 2018, and was written by reporter Paula Span. She writes, “Did you fall in the bathroom and fracture your hip? Medicare, if you have it, will pay thousands of dollars for surgery to repair the injury and thousands more for your resulting hospital stay and rehab in a nursing home.” However, she adds, “Medicare wouldn’t have paid $200 to have grab bars installed in your bathroom, or covered the cost of a $22-an-hour aide to assist you in the shower — measures that might have helped you avoid the accident.” According to Span, doctors have labelled this restrictive approach to senior health care “narrow, often counterproductive,” and it has been the subject of feverish debate. One policy expert from the Kaiser Family Foundation gave a relevant example: “You don’t want somebody with asthma rushing to the emergency room with a breathing problem that could have been prevented with an air conditioner,” she said – but Medicare won’t pay for an air conditioner, yet they will cover costly emergency medicine.
Medicare Advantage Changes Represent “A Tectonic Shift” in Senior Health Care
All that, writes Span, may be changing. Beginning with last fall’s enrollment season, officials at CMS (the Centers for Medicare and Medicaid Services) “reinterpreted” the range of supplemental benefits MA plans would be allowed to offer. As a result, says the New York Times, “When Medicare’s open enrollment period [began last] October 15, the private insurers that underwrite Advantage plans — which already lure seniors with things traditional Medicare can’t cover, like eyeglasses, hearing aids and gym memberships — [were] free to add a long list of new benefits.” Some of the examples have included adult day care programs, home health care aides to help with activities of daily living like bathing and dressing, palliative care at home for some patients, home safety devices and modifications like grab bars and wheelchair ramps, and transportation to medical appointments. Additions like these to MA policies represent substantial change – what one geriatrician called “a tectonic plate shift” in senior health care.
“What I find most fundamental is the recognition, by CMS and Congress, that this bright line between ‘medically necessary’ and things necessary to maintain health — like proper nutrition and transportation to a doctor’s office — is an illusion,” one New York geriatrician told the New York Times. In other words, either we can invest in “simple things” now or we’ll be paying for hospitalization and ER visits later.
Are Medicare Advantage Changes Boosting Enrollment? The Answer Seems to Be Yes
A few months ago, this article from Forbes provided an interesting snapshot of the impact all this enhancement of Medicare Advantage seems to be having in the marketplace. “Medicare Advantage enrollment will rise to 38 million, or 50 percent market penetration by the end of 2025,” according to a recent report. That’s a big jump from the 35 percent of Medicare beneficiaries (about 20 million Americans) enrolled in MA plans today. But Forbes suggests there’s still more pot-sweetening to come. “The Trump administration is proposing new rules to allow Medicare Advantage plans to provide seniors more supplemental benefits, which is expected to attract even more people to such coverage,” the magazine reports. Last spring, CMS said it was “reinterpreting the standards for health-related supplemental benefits in the Medicare Advantage program to include additional services that increase health and improve quality of life.” Translation: more non-traditional benefits are on the horizon.
Is there a downside to all these added MA benefits? As we re-read the New York Times article, experts have two concerns. First, traditional Medicare still covers a huge number of eligible seniors, but they aren’t getting all these perks. “What particularly troubles skeptics,” says the New York Times, “is that these intended improvements completely bypass most Medicare beneficiaries — the two-thirds who have stuck with traditional Medicare.” Second, there’s nothing in the new rules that precludes insurance companies from “bait-and-switch” schemes. “Advantage plans could provide certain benefits one year, then withdraw them the next, in the same way that drug coverage shifts,” says the Times article. Medicare Advantage is already confusing, with over 20 different plans offered by a handful of big insurance companies. The new features with potentially bewildering options are bound to make the choice more perplexing.
Medicare Advantage Changes are Part of a Bigger Planning Picture
For now, no one seems to have any definitive answers to these questions, and we at AgingOptions will be watching for more news about these new policy options to help you make an informed decision. The choice between traditional Medicare and Medicare Advantage has to be based on what’s right for you, not on slick marketing. With all that said, this is a good time to remind you that, while medical coverage is essential to a secure retirement, it’s only one piece of the “retirement puzzle.” Unless your finances are protected, your legal plans well-crafted, your housing options clearly thought-out and your family well-informed about (and supportive of) your wishes, your retirement is at risk, whether you have good health care or not.
Please accept our invitation to join Rajiv Nagaich live and in person at one of our highly popular LifePlanning Seminars where he will explain in entertaining detail our uniquely comprehensive approach to the art and science of retirement planning. There’s no cost and no obligation, simply a chance to have many of your retirement questions answered – including some you didn’t know you needed to ask! There’s a series of upcoming seminars listed here on our Live Events page where you can sign up for the event of your choice online (or call us for assistance). Come get the inside story of this retirement planning breakthrough with Rajiv Nagaich of AgingOptions. Age on!
(originally reported at www.nytimes.com)