It’s Medicare season, when Western New York’s seniors struggle to navigate the confusing array of options, features and prices of Medicare or Medicare Advantage plans.
The Medicare open enrollment period, which began Oct. 15, is when seniors can sign up for the first time or switch between plans without penalty.
With just four weeks to go before open enrollment ends on Dec. 7, consumers are scrambling to understand the myriad choices, which can be dizzying even to the most knowledgeable and perceptive people.
Kathy Shaklee of Grand Island calls the whole process “aggravating.”
“Five years ago, the plans were totally out of hand, but over the past few years, stuff has become more simplified. They cut down on the number of programs,” said Shaklee, 68, who has a Medicare Advantage plan from BlueCross BlueShield of Western New York. “They’ve got it down to six to eight plans now, but there has got to be a simpler way.”
Insurers say they’re working to make the process simpler and less stressful, including reducing the number of options and holding frequent informational seminars and maintaining customer help centers. Officials often spend an hour or more explaining Medicare and their plan details to already-cynical and often-grumpy audiences or during one-on-one sessions.
There’s traditional Medicare, Medicare Advantage, Medicare Supplement or Medigap, and Medicare Part D, as well as retiree coverage through employers if that’s still available. And some of those categories have many options within them — such as which company to choose and which of that company’s offerings meet their needs and budgets.
Basic Medicare provided by the government is almost automatic. Consumers don’t have to enroll in a Medicare Advantage plan, which usually costs extra. However, the plans typically offer more benefits and more extensive coverage, and consumers can work with a local insurance company instead of directly with the federal government, so the Advantage plans have become more popular, especially in Western New York.
Understanding the game can be a shock for those who have just turned 65 and are eligible for Medicare for the first time, after decades of having much more limited options and simpler choices courtesy of their employers.
“This is complicated, no matter how straightforward I might try to make it,” said Michael Burke, vice president of Medicare for Univera Healthcare and Rochester-based parent Excellus Health Plan. “As an active employee, you never really had to make too many other decisions. Your employer picked for you. People just get totally overwhelmed by it.”
Consumers must wade through thick packets of information, digest what they hear at informational seminars, senior centers and other forums.
“Medicare is complicated enough,” said Christian Miller, general manager of federal products for HealthNow New York, parent of BlueCross BlueShield of Western New York. “To the extent that we can make it understandable, we try to break it down into terms that are as simple as possible.”
There are so many companies to choose from. Western New York’s dominant insurers – HealthNow’s BlueCross Blue Shield, Independent Health Association and Univera – control the bulk of the local market for Medicare Advantage. But coverage is also offered by WellCare, UnitedHealth Group, Universal American Corp., and MVP Health Care. Drug plans are available through AARP, Humana, Aetna, Cigna, ExpressScripts, HealthSpring, EmblemHealth, Unicare and a few other carriers. And each has more than one plan to choose from.
“We encourage people to shop,” said Linda Rehrauer, director of government sales and services for Independent Health. “This is the time of year when you want to look at your options.”
No cost options
Plans have changed from last year, and prices have gone up — premiums for one Independent Health plan will jump 55 percent next year. As with commercial insurance, Medicare premium hikes reflect the benefits offered and the continued rising costs of medical care because of longer life expectancy, more expensive technology, procedures, and drugs, and more frequent use of services.
Independent Health said its Medicare Advantage enrollment has grown 38 percent since 2010 to over 61,000 and it spent more than $664 million in medical expenses for Medicare Advantage members in 2011, resulting in a loss for that business line and prompting the rate increase. But that doesn’t make it any easier or more palatable for seniors, who aren’t earning much more than they did a year ago.
“I was angry,” said Judith Cefali, 70, of Depew, who had switched two years ago to Independent Health after seeing her rates at BlueCross “going up and up” while “I was getting less satisfaction” with the plan. “It’s not going to fit with my Social Security. Too bad Social Security doesn’t go up as much.”
So insurers are trying to make sure that low-cost options — especially one with no premium — are still available, with all three local carriers having at least one such plan. And they’re trying to spread the word that financial assistance is available through government subsidies for those with the least income to spend, from programs like New York state’s EPIC or the federal government’s Extra Help.
“It certainly hasn’t gotten easier for people to digest all this information and walk away feeling I’ve made the right choice,” Burke said. “It’s pretty complicated for people. It’s overwhelming the amount of detail that you have to follow so you have peace of mind.”
Covering 40 million
Established nearly 50 years ago, Medicare is the government’s health plan for seniors over age 65, estimated at more than 40 million people. The original program consists of coverage for in-patient hospital, nursing home, hospice and some home health care, known as Part A, and coverage for physicians, outpatient care, medical supplies and preventive services, known as Part B.
Part A is free as long as you paid Social Security taxes while employed for at least 10 years. The premium for Part B, currently $99.90 per month, is deducted automatically from Social Security payments each month. Medigap plans cover the deductibles and out-of-pocket expenses that aren’t covered by Parts A or B.
Part D, introduced in 2006 and provided through private insurers for a premium, provides prescription drug coverage, but also includes the infamous “donut hole” between the initial coverage cap of $2,970 and the trigger when catastrophic coverage kicks in, after consumers have spent $4,750 out of their own pocket. In between, consumers pay 79 percent of generic drug costs and 47.5 percent of brand-name costs.
Then there’s Medicare Advantage or Part C. Originally introduced in 1997 and renamed in 2003, these are plans offered by private insurers that contract with the government to provide medical coverage to seniors. The plans are subsidized by the government, but also usually charge consumers a monthly premium and include more cost-sharing.
These plans, which can include HMOs, point-of-sale, fee-for-service, PPOs or medical savings accounts, provide the same coverage as original Medicare, but often go beyond to offer more benefits, features and services, such as gym memberships. They usually include the drug coverage with the premium.
Nationwide, out of 50 million Medicare beneficiaries, about 15 million or 30 percent are in Medicare Advantage plans. Locally, the rate is closer to 50 percent.
Experts say key factors to consider are whether you want lower co-pays or lower premiums; how healthy you are and how often you need services; the size of hospital co-pays and deductibles; the availability of vision, hearing or drug coverage; and whether you want to be able to use any doctor or are satisfied with a network. “People want the plan with the most value,” Rehrauer said.
The biggest price hike in Western New York this year — and source of the most outrage — came in Independent Health’s Encompass 65 HMO plan. That plan had been $39.80 a month this year, but is going up to $62 next year — a 55 percent increase.
“It’s not that $62 is so outrageous. It’s the 55 percent increase that is crazy,” said Nancy M. Cassick, 65, of Lancaster. “What other cost went up 55 percent in the past year? Gas prices didn’t even go up this much. Food prices haven’t gone up this much.”
Independent Health officials note that many people with low-income are enrolled in EPIC or Extra Help programs, which provide premium and other financial assistance for consumers on Medicare plans with drug coverage. For those members, the Encompass 65 premium went from $0 to $21.20.
“We were very aware of this,” Rehrauer said. “That’s why it was so important to continue to offer options that would resonate with people and to offer comprehensive coverage.”
To compensate, Independent Health introduced a new HMO point-of-sale plan, Encompass Essential, with higher co-pays but no premium. The company also offers two Passport preferred provider organization (PPO) plans, one with a lower premium and the other with lower co-pays.