A new study by researchers at Harvard Medical School has found that “Medicare Advantage” plans marketed by private insurance companies that offer too many options confuse seniors and lead to poor choices, especially among those who are cognitively impaired. Other evidence confirms that regular Medicare in many cases offers important advantages over the plans that private insurance companies market under the “Medicare Advantage” program.
The new study by J. Michael McWilliams, M.D., Professor of health care policy and medicine in the Department of Health Care Policy, Harvard Medical School, and the Division of General Internal Medicine and Primary Care, Brigham and Women’s Hospital, in Boston, Massachusetts, and colleagues, was published online and in the September, 2011 print issue of Health Affairs.
According to the researchers, some seniors (particularly those with cognitive impairment or dementia) become overwhelmed by the variety of complex Medicare Advantage plans offered to them, and this effectively prevents them from finding the best plan to fit their needs.
“We are providing the most complex insurance choices to the very population that is least equipped to make these high-stakes decisions,” said Dr. J. Michael McWilliams, the lead study author, in a news release about the study issued by Harvard University.
The Medicare Modernization Act of 2003 increased the number of private plans participating in the Medicare Advantage program. This law was touted at the time as creating more competition, which its sponsors said would lead to lower premiums and result in better benefits, including prescription drug coverage.
The study by the Harvard researchers focused on measuring how these changes affected seniors in real life, and specifically how they affected enrollment in Medicare Advantage plans, which are offered by private insurers, compared to traditional Medicare, which is offered by the federal government.
The Study Research
The Harvard researchers examined approximately 22,000 enrollment decisions made by more than 6,600 Medicare participants over four years, in light of the participants’ mental status and the plans available to them.
The researchers pointed out that 25 percent of U.S. counties currently offer seniors more than 30 Medicare Advantage options to choose from. “Most other Americans choose from just a few health plans, but elderly Medicare beneficiaries often have to sift through dozens of options,” Dr. McWilliams said.
The study, found that enrollment in Medicare Advantage increased when the number of Medicare Advantage plans available to seniors was fewer than 15. On the other hand, enrollment dropped when there were more than 30 plans available.
In addition, the researchers found that elderly people with cognitive impairment were much more likely to choose traditional Medicare by default, and less likely to take advantage of a wider array of benefits offered by Medicare Advantage plans.
“Elderly adults with low cognitive function were less responsive to the generosity of available benefits than those with high cognitive function when choosing between traditional Medicare and Medicare Advantage,” the authors wrote.
Given that the number of Americans with Alzheimer’s and other types of dementia is exploding in what the Alzheimer’s Association has termed an “Alzheimer’s Epidemic,” as our population ages, the study findings highlight a need for policymakers to simplify choices and find ways to assist seniors in making better decisions in choosing Medicare plan options, the researchers said.
“Simplifying choices in Medicare Advantage could improve beneficiaries’ enrollment decisions, strengthen value-based competition among plans, and extend the benefits of choice to seniors with impaired cognition. It could also lower their out-of-pocket costs,” the authors wrote.
“Efforts to limit choice and guide seniors to the most valuable options could especially benefit those with cognitive impairments, who without more help appear to be leaving money on the table,” Dr. McWilliams told HealthDay. “Better enrollment decisions could in turn strengthen competition by rewarding high-value plans with more enrollees,” he said.
In many cases, the better choice for seniors may in fact be the traditional Medicare plan, and simplifying and standardizing the way in which Medicare Advantage plans are marketed may help seniors understand this.
According to the Medicare Rights Center (MRC), a non-profit consumer advocacy group, Medicare Advantage plans have serious drawbacks compared to the original Medicare.
Among the disadvantages with “Medicare Advantage” cited by MRC:
- Medicare Advantage plans may charge you higher costs than traditional Medicare for skilled nursing care, home health care and in-patient hospital costs and may in some cases offer inferior benefits to those offered under traditional Medicare;
- Medicare Advantage includes unstable private plans that may suddenly stop or change coverage;
- Many Medicare Advantage plans operate like HMO’s and restrict your choice of doctors, hospitals and other health care providers;
- Some Medicare Advantage members report problems getting urgent or emergency care.
Some of these problems with Medicare Advantage may be fixed under the Affordable Care Act championed by the Obama Administration, however at present the future of the Affordable Care Act is in question, since it is under attack in the courts by several lawsuits brought by right wing governors and attorneys general of 26 states.
The full study report, “Complex Medicare Advantage Choices May Overwhelm Seniors—Especially Those With Impaired Decision Making,” is available online in the September, 2011 issue of Health Affairs.
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