The signs of fall:
And advertisements for Medicare plans.
Medicare’s Open Enrollment Period, the time when Medicare beneficiaries can compare coverage options and choose health and drug plans, began on October 15, 2023, and ends on December 7, 2023. If you watch television, or pass a billboard, you have seen them—ads promoting various Medicare Advantage plans, or assistance with finding a plan. There are many options. Some promote low (or no) monthly premiums. Others list additional amenities. There are offerings from well-known brands, and companies you have never heard of. There are celebrity spokespeople, earnest testimonials from program participants, and scripted conversations set in coffee shops and parks of friends talking about their perfect insurance plan. Research by the Kaiser Family Foundation found more than 1,200 unique ads for Medicare aired on television more than 643,000 times last year.
Medicare, Medicare Advantage, Medigap. Which plan is best for you?
Most American adults ages 64 and under obtain health insurance coverage through their employers. Workplace plans are also the source of healthcare coverage for spouses and dependents. Workplace plans may offer multiple tiers of coverage, but for the most part, the employee selects from a short list of coverage options. But in retirement, the consumer is faced with a wide array of choices. How do you know plan is the right one for you?
Medicare began in 1965. President Lyndon Johnson signed the law on July 30 at the Truman Presidential Library in Independence, Missouri. The program extended health coverage to persons ages 65 and older who were not well served in a health insurance marketplace that was primarily built on employer-sponsored health plans. Medicare enjoys broad popular support among those covered by the program, and the general public. If you are not covered by Medicare, you probably know someone who is. The broad reach of Medicare coverage extends its influence into how private insurance operates and how medical treatment is identified, covered and billed. According to the Centers for Medicare and Medicaid Services (CMS), Medicare accounted for 21 percent of total national health spending in 2021, 26 percent of spending on both hospital care and physician and clinical services, and 32 percent of spending on retail prescription drug sales.
Healthcare has changed dramatically since 1965, and Medicare has adapted to meet the changing landscape. In 1980, the Bachus Amendment allowed for creation of Medicare supplement plans (“Medigap”) to augment traditional Medicare coverage. Coverage of prescription medications was broadly expanded in 2003, when President George W. Bush signed the Medicare Prescription Drug, Improvement, and Modernization Act. Private insurers began to offer coverage through Medicare (“Part C”) in 1985. The Balanced Budget Act of 1997 expanded Part C coverage. Today these plans are referred to as Medicare Advantage plans.
Medicare Advantage was created as an effort to limit risk and control costs for Medicare coverage. A private insurer contracts with Medicare to offer comparable coverage, and absorbs the risk if spending exceeds the amount of the contract. This provides the federal government with more predictable expenses for budgeting. Companies have an incentive to control costs, and since consumers have the option to choose (or leave) a plan, the intended outcome is to focus on health promotion and wellness. Plans began to offer discount fitness memberships and incentives for participating in health and wellness activities. They employed nurses and caseworkers to monitor and encourage adherence to post-hospitalization rehab plans, maintain a healthier diet and keep medical appointments. Consumers were offered plan options that might offer lower out-of-pocket costs or include coverage for services outside of traditional Medicare.
Medicare Advantage plans must offer “comparable” coverage to traditional Medicare. But comparable can be in the eye of the beholder. Plans may control costs by limiting the number of providers offered, or options for treatment. Coverage areas and service quality can vary widely. There are excellent Medicare Advantage plans. There are excellent Medigap plans that augment traditional Medicare. And there are some that are not so excellent. How is a person supposed to know which option is best for them?
Medicare? Medigap? Medicare Advantage? Which brings me back to those commercials. The KFF study found that many ads offer information that is incomplete, or even misleading. A common tactic is to suggest calling a “Medicare Hotline” for more information. Most of these toll-free numbers are to the sales department of the carrier running the ad and are not calls to Medicare or independent Medicare advisors. Telemarketing and aggressive sales tactics may also overwhelm consumers. So how do you find accurate information to make the right Medicare selections to meet your healthcare needs?
Fortunately, there are reliable sources for information about Medicare plans.
Health and healthcare expenses can be a source of concern for many older Americans. Finding a Medicare plan that works best for you - meeting your healthcare needs and your financial considerations – can be challenging. Fortunately, there are people and resources available to help guide you. And that assistance is only a click or a phone call away.
For further reading:
Read the KFF Research report on Medicare television advertising.
Read the KFF Research report on the popularity of Medicare.
US Census data on health insurance coverage
Learn the basics about Medicare, Medigap and Medicare Advantage programs by visiting Medicare.gov
Download a copy of Medicare & You from Medicare.gov