The annual marketing season for private Medicare health and prescription drug plans is under way, and for seniors that should mean a flood of TV ads and direct mail touting the extra benefits offered by various plans.
This fall, seniors must decide earlier on which plans to enroll in for next year. And with the premiums on some large drug plans shifting, as well as new zero-premium Medicare Advantage and prescription plans being rolled out, insurance experts advise seniors to study their options even more closely and shop around before signing on the dotted line.
“You’ve got to be a very careful shopper,” said John Gorman, chief executive with Gorman Health Group LLC, a Medicare consulting firm. “You can’t just look at the monthly premiums. You have to look at what your out-of-pocket costs would be.”
Starting this weekend, plans can start marketing to seniors, who have from Oct. 15 to Dec. 7 to sign up. In the past, the sign-up period started a month later and lasted until year-end.
“That’s something people can easily miss if they’re not paying attention,” said Mary Beth Best, program director with MedAssurance, a nonprofit that provides education about Medicare to beneficiaries. “My advice to people is to try to take care of it before Thanksgiving.”
For next year, seniors statewide can choose among 71 Medicare Advantage health plans, down slightly from the 74 available in Tennessee this year, according to Avalere Health, a consulting firm.
However, the total number of plans available in Davidson County remains unchanged at 25. Meanwhile, 32 Medicare prescription drug plans are available statewide, two fewer than this year. (Three new plans entered the state, but five were discontinued.)
Government business soughtIn the Nashville area, choices include a zero-premium Medicare Advantage plan with prescription drug benefits being reintroduced by BlueCross BlueShield of Tennessee, the state’s largest insurer.
In other developments, Humana lowered the premium on its Gold Plus HMO plan with out-of-network benefits by 44 percent to $26 a month, cut the copays for doctors’ office visits in half to $5 and added HCA hospitals to its network.
BlueCross’s aggressive offering and Humana’s recent acquisitions of two California-based Medicare Advantage operations illustrate how commercial insurers hope to expand their government-related business.
“They’re awakening to the fact that the commercial market is shrinking … and about the only growth you’re seeing right now is in government programs,” Gorman said. “And so the Blues are throwing down the gauntlet, particularly against HealthSpring right in their backyard.”
UnitedHealthcare added a benefit through which members can get new hearing aids at significant discounts. It also cut the copay for office visits on its AARP MedicareComplete plan by a third to $10; but it raised the copay for emergency room visits by 30 percent to $65.
Among prescription drug plans, monthly premiums on UnitedHealthcare’s AARP MedicareRx Preferred plan (4.7 million members nationwide) will increase 14 percent to $39.70 on average.
More hikes comingMeanwhile, premiums for a stand-alone prescription drug plan that Franklin-based HealthSpring Inc. offers as a result of its Bravo Health acquisition last year are rising 10 percent to $36.09 a month on average.
HealthSpring is the local Medicare Advantage plan market leader. But that price increase affects people mostly on the West Coast and not the HealthSpring plans here, said Greg Allen, HealthSpring of Tennessee’s president.
Avalere Health expects monthly premiums for prescription-drug coverage for Medicare recipients to fall next year by 4 percent on average overall, which means consumers who fully assess their options could trim some of their costs.
In addition to premiums, seniors should review deductibles, drugs covered by each specific plan and copays or co-insurance.
For people with no medications, the lowest premium plan should work, said Campbell Johnson, the CEO and online editor of Q1 Group, a medical analysis firm.
Marketing strategies among the competing plans vary.
UnitedHealthcare, for instance, expects to send out 50 million pieces of direct mail nationally and use newspaper ads and probably billboards in some markets, said Dale Cutler, executive director of the company’s Medicare Solutions Tennessee unit.
New rating methodNext year, Medicare’s overseer, the Centers for Medicare and Medicaid Services, also plans to begin rewarding Medicare Advantage plans based on a new Five-Star quality rating methodology. For drug plans, ratings are based on factors such as members’ experience in plans, customer service and accuracy of drug plan information.
For Medicare Advantage plans, the ratings also would be based on clinical outcomes of patients.
Those financial incentives are driving a sharper focus on quality among Medicare Advantage plans such as HealthSpring as they strive to reach five stars. And in some markets, that is leading to conflicts with providers.
In Rutherford County, for instance, about 2,000 members with physicians linked to independent practice association Stones River Regional IPA face a choice by the Dec. 7 open enrollment deadline of staying in HealthSpring’s provider network but with a new doctor, switching plans or going back to traditional Medicare.
The patients face such a dilemma because their doctors chose not to sign a new contract with HealthSpring, which wanted to bring more physician and practices into a quality of care program that involves more coordination and oversight.
For some patients, the changes have meant disruptions — especially because they have to wait until open enrollment to sign up with a plan and network that includes their former doctor and must wait after year-end to see them.
Gorman, the industry consultant, expects more such disputes as “accountability” becomes a bigger buzzword and affects health-care delivery.
“It’s just a whole new pay-for-performance revolution that we’re seeing,” he said. “… Eventually, that’s going to move from being pay for performance to perform or die.”
