Insurers target seniors with shifting Medicare options

With a marketing blitz for products old and new, health insurers are pulling out all the stops in Minnesota to woo more than a quarter-million Medicare beneficiaries who must find new coverage for 2019.

Open enrollment for people in Medicare starts Monday, and a Star Tribune analysis of federal data shows that consumers are seeing big changes in the lineup of Medicare health plan offerings, including more of an urban-rural divide in the choices they're finding.

At the same time, there are more options in the parallel market where people stay with original Medicare and can buy Medigap supplemental insurance policies plus stand-alone Part D drug plans.

"It's a very different landscape," said Tom Peterson, owner of Twin Cities Underwriters, an insurance agency in Roseville.

Federal law is forcing health insurers next year to eliminate Medicare Cost plans across 66 counties in Minnesota. The sunsetting of these health plans is prompting an unusually large number of beneficiaries — more than 300,000 people in the state — to switch coverage all at once.

For Medicare beneficiaries, there's confusion and stress — and the chance this fall to attend hundreds of information sessions.

"I've seen a lot of change over the last 11 years, but really nothing like the change that we're all going through right now," Joel Stich, a senior director at Blue Cross and Blue Shield of Minnesota, told 250 people last week at a Minneapolis event that included coffee, cookies and counsel.

When the Cost plans go away, some enrollees will be steered toward a comparable Medicare Advantage plan from their existing health insurer. Cost and Advantage plans are similar in providing Medicare benefits via private insurers, but differ in how insurers get paid by the government.

Not all Cost plan enrollees will be steered to an Advantage plan, and those who are can make other choices. Another option is original Medicare, where consumers often buy a Medigap policy and a Part D prescription drug plan to supplement the traditional government insurance program.

The Star Tribune analysis found insurance companies are offering 73 Medicare health plans next year, up from 48 plans this year. The mix of plans is very different, with insurers dropping Cost plans in many places and adding new Medicare Advantage plans in others.

The number of companies approved to sell Medigap plans has increased from 26 to 31, according to a review of state Commerce Department data. The Minnesota Board on Aging says the number of stand-alone Part D prescription drug policies is increasing from 23 plans to 28 plans, as well.

Despite increases in products sold by insurers, the number of health plan options in most counties is going down, according to the Star Tribune analysis. That's because Cost plans generally were sold statewide, whereas many Medicare Advantage plans are being sold in a subset of counties. Plus, carriers sold more Cost plans that didn't include drug coverage, whereas that benefit is part of most Advantage plans.

In many cases, people in rural counties will have fewer choices, the analysis shows, but more than 10 health plan options remain in all cases — a tally that doesn't include all the options of the Medigap and Part D stand-alone choices. The decline is less noticeable in Hennepin County, where consumers will find more than 30 health plan options.

"People will still have choices," said Kelli Jo Greiner, health policy analyst with the Minnesota Board on Aging. "They may not have as many choices as they did last year, especially with the Cost plans not being an option for them, but they will have Medicare Advantage options and they will have Medigap policy options."

Many Medicare beneficiaries don't enjoy shopping for a health plan, opting to simply stick with the same coverage year after year, said David Lipschutz, a senior policy attorney with the Center for Medicare Advocacy. The Cost plan transition forces people to make a change, and it's critical that they do their homework, Lipschutz said.

Typically there are trade-offs between lower premiums and higher out-of-pocket costs. New Medicare Advantage plans with $0 monthly premiums get attention, but they can bring greater expenses when people use care.

Medicare Advantage plans tend to have tighter networks of doctors and hospitals, so consumers must make sure their doctor is in the network. Medigap policies tend to have much wider choice in doctors and hospitals, although Advantage plans contend that they help people by coordinating care.

Knowing how different plans cover particular drugs can make a huge difference, so the details matter a lot. As health plans institute more network rules for pharmacies, consumers are finding they might pay more or less depending on where they go for their medicine.

Some of the new plans offer extra benefits that can be good news for consumers who want them — things such as gym memberships and transportation benefits — but those extras also add variables to an already complex decision. Another key variable is that people leaving Cost plans have a one-time shot at getting some Medigap plans without answering health history questions that might block them from getting coverage later.

"If you step back, really, isn't this situation absurd? How is anyone supposed to be able to navigate all this?" Lipschutz asked. "Is there such a thing as too much choice? I would say: Yes."

Minnetonka-based Medica will sell Medicare Advantage plans across 29 counties, putting a focus in the remaining "sunset" counties on the insurer's new Medigap policies. With the Cost plan transition, the market for Medicare health plans in Minnesota is becoming more like the rest of the country, said Thomas H. Lindquist, a senior vice president at Medica.

Medicare Advantage plans tend to do better financially in urban areas with competitive health care markets, as well as counties with higher reimbursement rates from the federal government. The end result, Lindquist said, is that some insurers don't offer the coverage on a statewide basis.

Newcomers UnitedHealthcare and a joint venture from health insurance giant Aetna and the Minneapolis-based Allina Health System are selling in only a few counties, including the Twin Cities. Bloomington-based HealthPartners will offer Medicare Advantage plans in the Twin Cities metro area and around St. Cloud, but its statewide option will be Medigap.

"This is a time of chaos for 330,000 Medicare-eligible individuals in Minnesota," said Jim Eppel, chief administrative officer at HealthPartners. "We have heard in the broker community and otherwise that some are suggesting, in a time of chaos, a Medicare supplement may be a good place for you to be, until things settle out."

Not everyone agrees. Blue Cross is selling Medigap coverage as well as Medicare Advantage across all counties where Cost plans are going away. Kentucky-based Humana will sell supplements plus Advantage plans in 83 counties. Minneapolis-based UCare will continue to sell Medicare Advantage coverage statewide.