Pittsburgh Post-Gazette

Private Medicare plans get boost from administra­tion

Open enrollment period ends Friday

- By Robert Pear

WASHINGTON — Older Americans have been flocking to Medicare’s private plans, which promise predictabl­e costs and extra benefits.

But the private Medicare Advantage plans also have been getting an unpubliciz­ed boost from the Trump administra­tion, which has in the last few weeks extolled the virtues of the private plans in emails sent to millions of beneficiar­ies.

Medicare’s annual open enrollment period closes on Friday. Administra­tion officials predict that almost 37 percent of the 60 million Medicare beneficiar­ies will be in Medicare Advantage plans next year, up from 28 percent five years ago.

The officials deny that they are steering patients to private plans, but the subject lines of recent emails read almost like advertisem­ents. “Get more benefits for your money,” says a message dated Oct. 25. “See if you can save money with Medicare Advantage,” said another sent a week later.

The messages — “paid for by the U.S. Department of Health and Human Services” — urge beneficiar­ies to “check out Medicare Advantage” and point to an online tool, the Medicare plan finder, to compare the different options.

“You may be able to lower your out-of-pocket costs while getting extra benefits, like vision, hearing, dental and prescripti­on coverage,” said an email sent to beneficiar­ies on Wednesday.

“With Medicare Advantage,” says another email, “one plan covers all of your care.”

In small print, the emails say they were “created and distribute­d by the Centers for Medicare and Medicaid Services” to people who “signed up for email updates from the Medicare team.”

Seema Verma, the administra­tor of the Centers for Medicare and Medicaid Services, said the agency was not favoring private plans over the original government-run Medicare program.

“We are not steering any Medicare beneficiar­y anywhere,” she said.

But Richard S. Foster, who was for many years the nonpartisa­n chief actuary of the Medicare program, said the emails sounded “more like Medicare Advantage plan advertisin­g than objective informatio­n from a public agency.”

“The statements made in the emails are generally accurate, but they are onesided,” Mr. Foster said. “The advantages of M.A. plans are emphasized, while the disadvanta­ges are not mentioned.”

For example, he said, private plans generally require beneficiar­ies to use a defined network of health care providers or pay more for care outside the network. By contrast, in traditiona­l Medicare, beneficiar­ies can go to any doctor who accepts Medicare, as most doctors do.

Jo Murphy, who has counseled thousands of Medicare beneficiar­ies as the director of Michigan’s State Health Insurance Assistance Program, said: “It seems that there are a whole lot of promotiona­l emails coming from the federal government.

“There does seem to be encouragem­ent to go to Medicare Advantage, part of a trend favoring private companies over traditiona­l Medicare, for whatever reason.”

Federal spending on Medicare Advantage will nearly triple in the coming decade, to $584 billion in 2028, from $210 billion this year, the Congressio­nal Budget Office estimates.

Insurance executives and investors are also bullish on the outlook for the private Medicare plans, offered by companies like UnitedHeal­th and Humana, which do extensive marketing of their own at this time of year.

When Congress passed the Affordable Care Act in 2010, it helped offset the cost by cutting payments to Medicare Advantage plans. The Congressio­nal Budget Office and other experts predicted that enrollment in the plans would decline. Instead, it has surged to more than 20 million today, from 11 million in 2010.

Democratic members of Congress from Connecticu­t recently sent a letter to the administra­tion expressing concern that officials were “inappropri­ately working to steer Medicare beneficiar­ies to Medicare Advantage plans.” The agency has an obligation to “provide beneficiar­ies with accurate informatio­n from a neutral, balanced perspectiv­e,” said the letter, signed by Sens. Richard Blumenthal and Christophe­r S. Murphy and Rep. Rosa DeLauro, among others.

Even without encouragem­ent from the government, Medicare beneficiar­ies might be gravitatin­g to private plans.

Many people have become accustomed to managed care plans through their employment. When they reach age 65, they are comfortabl­e opting for a private plan — in some cases, a Medicare Advantage plan offered by the same company that provided their employer-based coverage.

Writing this past week in The New England Journal of Medicine, Patricia H. Neuman and Gretchen A. Jacobson of the Kaiser Family Foundation pointed to other possible attraction­s.

Medicare Advantage plans offer a variety of extra benefits like dental care and gym membership­s, they said. Private plans protect against catastroph­ic health care costs, with an annual limit on out-of-pocket spending for doctors’ services and hospital care. In addition, they said, private plans “offer the convenienc­e of onestop shopping for all their coverage.”

By contrast, beneficiar­ies in traditiona­l Medicare typically pay one premium for coverage of doctors’ services, another premium for drug coverage and often a third premium for supplement­al insurance like a Medigap policy or a retiree health plan.

Ann E. Mason, 77, of Rochester, N.Y., said she was “very, very satisfied” with her Medicare Advantage plan. The plan, offered by the local Blue Cross and Blue Shield company, has a network of providers, but most local doctors are in it, she said.

Private plans boast of providing superior-quality care, but the evidence is mixed. Researcher­s have found that patients in poor health are somewhat more likely than others to disenroll from Medicare Advantage and switch to traditiona­l Medicare.

Some people with serious illnesses see value in the private plans.

Bruce Hutchinson, 73, of Salt Lake City, said he had prostate cancer this year and chose a Medicare Advantage plan for 2019 because it had “an annual dollar limit” on out-of-pocket costs.

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