Advantage Plans' Risk

By JANE ZHANG

Wall Street Journal

April 22, 2007

 

Millions of seniors have flocked to private Medicare plans, often with low

or even zero premiums. But for some, the new choices may also come with

risks.

 

When people enroll in these Medicare Advantage plans, they opt out of

traditional Medicare, in which the government pays medical providers

directly. Instead, the U.S. pays the insurers that offer the private plans;

some plans offer extras such as vision care in addition to covering

physician and hospital services.

 

One problem: When Medicare beneficiaries sign up for these plans, they don't

always understand the details, such as how much they will pay for physician

visits outside their plan's network or for hospital stays or treatments such

as chemotherapy.

 

Some beneficiaries have trouble finding providers willing to accept their

plans. And they can get tripped up as doctors transfer in and out of

networks, says Deane Beebe, spokeswoman for the Medicare Rights Center, a

New York-based advocacy group.

 

Good for the Healthy?

 

"Many of these for-profit plans work well when you are healthy," Ms. Beebe

says. "Once people get sick, that's when they find out the limitations of

the plan."

 

Mohit Ghose, a spokesman for America's Health Insurance Plans, an industry

trade group, says Advantage plans can be "extremely helpful" to seniors if

they choose ones that fit their needs. For instance, some plans provide

disease-management services and cap enrollees' out-of-pocket spending.

 

"To say that only healthy people should be in Medicare Advantage is highly

misleading," Mr. Ghose says.

 

In the past few years, Advantage plans have become more popular. In an

effort to expand private plans, Congress in 2003 raised payment rates to

managed-care companies. Insurers improved their offerings and pitched them

to seniors alongside the insurers' Medicare prescription-drug plans.

(Recently, there's been some talk in Congress of cutting payments to the

Advantage insurers.)

 

Today, one in five Medicare beneficiaries, or 8.3 million, has enrolled in a

private plan, according to the federal Centers for Medicare and Medicaid

Services. Among the biggest providers: Humana and UnitedHealth Group.

 

One-Stop Shopping

 

With all-in-one Advantage plans, seniors can avoid the hassle of enrolling

separately in Medicare, supplemental private insurance and prescription-drug

coverage. Some plans offer nurses' hotlines and other services to help

seniors understand and choose care.

 

But for some seniors, Advantage plans can prove to be more costly.

Low-income beneficiaries who need frequent care, for example, are also

covered by the federal/state Medicaid program. Some of those beneficiaries,

after switching to Advantage plans, have found out that they have to pay

more out of pocket for care.

 

Another danger: Seniors can inadvertently lose corporate retiree coverage

when they sign up for an Advantage plan.

 

In evaluating a plan's benefits and restrictions, Bonnie Burns of California

Health Advocates, a nonprofit Medicare education group, suggests getting

free help from state health-insurance counselors. Find them by calling

1-800-MEDICARE or online at

medicare.gov/contacts/static/allStateContacts.asp.

 

Medicare officials are taking notice of some marketing practices. Some

insurance brokers, for example, incorrectly marketed a type of Advantage

plan as traditional Medicare, according to the Centers for Medicare and

Medicaid Services. As a result, for 2008, the agency is planning to impose

more accountability and increased oversight. Some plans, for example, will

be required to call enrollees to make sure they understand what they are

getting into.

 

The expanded oversight will be "good for beneficiaries and the plans," says

Abby Block, director of Medicare's Center for Beneficiary Choices.

 

Email forum.sunday03@wsj.com.