Senior confusion about Medicare Advantage creating headaches for patients, providers

Each fall, seniors gather at a boot camp in Birmingham, Ala., for people entering Medicare to help them better understand the program and what they should consider when it comes time to choose a plan. The University of Alabama at Birmingham Health System's Viva Health, an HMO, hosts the event.

Its outreach efforts have grown as patients have asked more and more questions about an increasingly complicated program.

“They will come in to see their doctor and they’ll have pages printed out and they’ll say, ‘You know, I’ve got to make a decision’ … it really puts providers in a hard place,” said Thalia Baker, associate vice president of primary care at UAB Medicine in Birmingham, Ala.

Providers often find themselves trying to describe Medicare’s alphabet soup—Parts A, B, C and D—to their patients during an office visit instead of delivering care. Not only can that be frustrating for doctors and their patients, but it’s an effort that can seem futile at times because many patients just don’t understand how Medicare works. That can strain the relationship between providers and their patients. “Ninety percent of them don’t have a clue,” Baker said. “Most of our patients that are (dual-eligible), they’re not even quite sure what the differences are between Medicaid and Medicare.”

And more than half of seniors don’t understand the differences between Medigap and Medicare Advantage plans, according to an online poll conducted for the Better Medicare Alliance, an insurer-funded Medicare Advantage advocacy group, by Morning Consult.

That trend is reflected in the annual deluge of news articles explaining Medicare plan choices as the program’s open enrollment period approaches. And the effects of consumer befuddlement about Medicare coverage are mounting because the U.S. population is aging, thanks to the baby-boomer generation.

“Older adults and people with disabilities find the options and Medicare Advantage programs, in general, confusing,” said Fred Riccardi, president of the Medicare Rights Center, a consumer advocacy organization.

The CMS did not respond to requests for comment.

MA plans often cover prescription drugs and may cover vision, dental or hearing services for a higher premium. The plans increasingly offer additional health-related benefits such as meal delivery or carpet cleaning thanks to new flexibilities afforded by Congress and the Trump administration. They’re designed to help plans address seniors’ social determinants of health.

Policymakers had expected that more Medicare beneficiaries would opt for MA plans as baby boomers age into retirement because, unlike earlier generations, many of them have experience with managed care through their employer-based coverage. But only about a third of them choose an Advantage plan during their first enrollment period. Less than half of beneficiaries even knew about Medicare Advantage when they initially enrolled in Medicare, according to a survey by the Better Medicare Alliance.

Patients’ education level seems to be the dividing line between people who understand how Medicare works and those who don’t, said Anne Zaccheo, practice director for Nephrology Associates of Syracuse (N.Y.). People with higher levels of education tend to shop around and change plans from year to year. “They totally understand how to play the game,” Baker said. “But I would say they’re probably 10% of the population.”

Less-educated consumers, especially those dually eligible for Medicare and Medicaid, often don’t understand the basics of health insurance like deductibles, copays and coinsurance.  Even seemingly unrelated changes in health policy have caused problems for low-income Medicare beneficiaries. Alabama’s recent transition to Medicaid managed care led to “mass confusion,” Baker said.

During the past couple of years, the Trump administration finalized new rules that allow commercial insurers to offer more MA plans with a broader range of supplemental benefits and to vary cost-sharing. An unintended consequence of providing consumers with more options is that it’s easier for them to become confused, said Adam Finkelstein, counsel with Manatt Health. There were 267 MA plans without a rating in 2020, about 40% of the total.

Consumers might not be able to easily distinguish between the plans available to them, even if they understand the options, because of the difficulty in predicting future health needs. “These arcane distinctions are not intuitive, which makes it difficult for people (to choose the right plan),” said Helaine Fingold, an attorney for Epstein Becker Green and a former CMS staffer.

The CMS approves Medicare Advantage plan marketing to protect consumers. Still, fierce competition can cause problems in certain regions as plans fight for market share by offering and advertising benefits directly to consumers. Those differences aren’t marketed to people in a standardized way, so “the marketing can still be deceiving.” Baker said. “They’re confusing, even to us,” she said.

These plans cause problems for doctors and patients because many of them offer consumers financial incentives for attending certain types of appointments or having tests, such as a mammogram. But consumers often get those rewards through several channels, which can cause additional confusion and work for providers. In some instances, providers need to fill out a form for the patient to get their money back. It’s difficult for providers and patients to track. “If a patient was really sophisticated, they would just say, ‘I want you to lower my premium,’” Baker said.

Medicare beneficiaries frequently experience gaps in outpatient coverage and lifetime penalties if they don’t sign up for Part B coverage during their initial enrollment period. Providers may need to refund payments they received from insurers once the plan realizes that the patient should have been covered by Part B, which can cost providers and cause problems between doctors and patients.

Nearly 760,000 people paid a late penalty on their Part B premiums in 2018, raising costs by an average of about 28%, according to a Congressional Research Service report.

Seniors also can suffer major setbacks if they pick a Medicare plan that doesn’t fit their needs. Many beneficiaries are attracted to Advantage plans because of their lower premiums and extra benefits, but they’re not appropriate for everyone because they have limited networks and can cost more in the long run.

These limitations can make it more difficult for patients to access the care that they’re prescribed if certain providers are out-of-network. MA enrollees could be billed for care that they thought was covered. That might make them less willing or able to adhere to their treatment.

And while many seniors who shop for coverage understand that MA plans have closed networks, they tend to focus on their primary-care provider. They often pay less attention to whether their specialists participate in the plan, like an ENT they’ve seen for years.

“Then they see their primary-care physician, and we say, ‘We can’t refer you to Dr. X anymore because he’s not in your plan,’ ” Baker said. “Then the patient is upset and they feel like somebody lied to them.”