Medicare shoppers find $0 premium plans

Medicare beneficiaries getting their first detailed look at 2019 health plan options are seeing a lot more zeros — as in health plans with no monthly premiums.

The federal government on Monday let insurers begin fully marketing Medicare health plan options for next year, when more than a quarter million Minnesotans will need to find new coverage due to a change in federal law.

Five health insurers next year will sell $0 premium plans in Minnesota — up from one carrier currently — while two other companies will sell coverage with monthly premiums below $30, according to a Star Tribune review of federal data.

While a health plan with no premium might sound good, state officials caution that consumers should read the fine print. "There will be more premium-free plans," said Kelli Jo Greiner, health policy analyst with the Minnesota Board on Aging. "What people need to understand is, with not paying a premium, it means that your cost-sharing is probably going to be higher in terms of deductibles, coinsurance and copays."

"There are several other things they need to look at," Greiner added. "Does their [health care] provider participate with that plan? Does their pharmacy participate, and are their drugs going to be covered?"

This year's annual shopping season for Medicare coverage is unusual because an estimated 320,000 Minnesotans with a type of coverage known as "Medicare Cost" health plans will find their policy disappear due to federal law. For more than a decade, the government has been pushing to "sunset" the Cost plans as part of a bipartisan push to simplify the administrative structure in Medicare, policy experts say, while also pushing insurers take financial responsibility for managing health care use.

Cost plans are being eliminated in counties where there's significant competition from "Medicare Advantage" plans, which are similar since consumers also obtain their Medicare benefits via private insurers. The competition rule means Cost plans will disappear in 66 counties across Minnesota including Hennepin, Ramsey and others in the Twin Cities metro.

Cost plans in Minnesota haven't been priced with a $0 premium, but insurance companies will do so for seven Medicare Advantage plans in 2019, according to a Star Tribune review of beneficiary materials sent last month by the federal government to about 700,000 households in Minnesota. In many cases, zero-premium plans are being offered only in certain counties.

Another eight health plan options are priced at less than $30, according to the Star Tribune review, while another 70 options have monthly premiums ranging from $33.60 to $300.

Across the country, about 46 percent of enrollees are in Medicare Advantage plans that will continue to have a zero premium for 2019, the federal government says. Zero-premium plans are possible because of the way the federal government structures payments to Medicare Advantage insurers, said Gretchen Jacobson, a Medicare expert with the California-based Kaiser Family Foundation.

"The monthly payment from Medicare to the plans is, on average, between $800 and $900 [per person] per month," Jacobson said. "So, it's a relatively small share [of the overall premium] that beneficiaries are paying."

While things like zero-premium plans and health insurer marketing efforts will put a lot of attention on Medicare Advantage plans, consumer advocates say Minnesotans shouldn't lose sight of a different option where beneficiaries return to original Medicare and also purchase a "Medigap" supplemental policy.

Medigap coverage in many cases comes with a higher premium, but the policies might be a better fit for people with significant health problems or for those who travel a lot, according to consumer advisers.

"Traditional Medicare lets you see any physician across the country that takes Medicare, whereas in Medicare Advantage you have more restricted choices or you're required to pay more to see other physicians outside the network," Jacobson said.

Medicare Advantage insurers also can require referrals, prior authorization and other measures that could make it more difficult for individuals to obtain the services they want, Jacobson said. She pointed to a study last week from the inspector general at the U.S. Department of Health and Human Services that raised concerns Medicare Advantage plans might be wrongly denying medical care to patients in order to increase profits.

"There's never been any data before on the frequency with which plans deny coverage, so it's really the first study that shows how often plans are using this ability to do so," Jacobson said of the report, adding that it doesn't provide information about denial rates by particular insurance companies.

America's Health Insurance Plans, a trade group for insurers, responded that health plans employ medical professionals, and approve 98 percent of all claims. The trade group added that the recent report "found that for the [Medicare Advantage] plans examined in 2016, 96 percent of all prior authorization requests and 92 percent of all payment requests received were approved."

In Minnesota, state officials have been worried that some people in Cost plans who don't make a choice between obtaining a Medicare Advantage plan or a Medigap policy will get a painful surprise with out-of-pocket costs. That's because some Cost plan enrollees who don't actively opt for replacement coverage will revert to the original Medicare program, which typically covers only about 80 percent of the cost for many services.

Another wrinkle is that people losing Cost plan coverage have a one-time opportunity during the upcoming sign-up period to get into a Medigap policy without answering health questions that could block them from enrollment down the road.

Cost plans in Minnesota are sold by only three insurers — Blue Cross and Blue Shield of Minnesota, HealthPartners and Medica — under the brands Platinum Blue, HealthPartners Freedom and Medica Prime Solution. For years they've been sold alongside Medicare Advantage plans from health insurers Humana and UCare.

All five of those companies are selling Medicare Advantage plans for 2019 in addition to two newcomers: St. Louis Park-based Allina Health and Aetna Insurance Company; and Minnetonka-based UnitedHealthcare. People can't sign up for a plan until Oct. 15, when the open enrollment period officially begins.

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck