An increasing number of seniors are choosing to get their Medicare benefits through Medicare Advantage plans. But do they understand what they’re signing up for?
A recent report suggests they may not, especially when it comes to which hospitals are included in the plans’ networks.
An alternative to traditional Medicare and administered by private insurers, Medicare Advantage plans are typically health maintenance organizations or preferred provider organizations that offer seniors hospital and medical coverage (Medicare Part A and Part B), and sometimes prescription-drug coverage (Medicare Part D), dental care or benefits such as gym memberships.
These plans typically offer lower out-of-pocket costs than traditional government-run Medicare in exchange for members using in-network doctors and hospitals.
The problem, according to the report from the Henry J. Kaiser Family Foundation, is that the size and composition of hospital networks varies greatly among plans, yet that isn’t always apparent to those shopping for coverage. Plan directories contain incorrect, confusing or outdated information about which hospitals and specialty institutes are included in networks, the study found, and the directories can be difficult to navigate. One directory featured 600 pages without a table of contents or index, it said.
Using the directories to pick a plan is “like trying to do your taxes with an abacus; it can be done, but not easily,” says Gretchen Jacobson, associate director at the Kaiser Family Foundation and co-author of the report, adding that Medicare’s website doesn’t provide an easy way to compare plan networks side by side.
Not created equal
About 17 million beneficiaries, roughly 30% of the Medicare population, enrolled in a Medicare Advantage plan in 2015, according to the Congressional Budget Office, which expects private-plan enrollment to grow to about 29 million Americans, or about 40% of the Medicare population, in 2025.
Many seniors like Advantage plans because in addition to added benefits such as dental coverage and gym memberships, they eliminate the need for additional insurance, such as Medigap, and some plans cover the gap in Medicare prescription-drug coverage known as the “Donut Hole.”
“These sorts of benefits can make a big difference to someone on a fixed income,” says Clare Krusing, a spokeswoman for America’s Health Insurance Plans, an industry group.
That said, some Advantage plan members can face significant expenses if they seek treatment out of the network, experts say, which is why having a clear understanding of the size and composition of each plan’s network is important.
Of the 409 plans studied by Kaiser, 23% offered what the report termed broad networks, meaning 70% or more of the hospitals in a county were included. About 61% had medium-size networks, meaning between 30% and 69% of all hospitals in a county were included; and about 16% had narrow networks, with less than 30%.
While some plans with narrow networks get good ratings from the Centers for Medicare and Medicaid based on metrics such as preventive care and customer service, the Kaiser study found that in general they are more likely to exclude institutions that specialize in treating rare or more complicated conditions.
According to the report, 75% of narrow networks excluded National Cancer Institute Cancer Centers, which have experience handling rare and complicated cancers and provide more access to clinical trials; 49% excluded academic medical centers; and 21% had no hospitals with an accredited cancer program.