If you’re enrolled in Medicare, you might want to turn off your television this time of year.
In the weeks ahead, the airwaves will be flooded with advertisements promoting insurance plans during Medicare’s open enrollment period, which will start on Sunday and end Dec. 7.
During open enrollment, you can make changes to your Part D prescription drug or Medicare Advantage coverage, and it’s important to review your current selections. Drug plans often change the prices and terms for covering medications — and your needs may have changed in the past year. Medicare Advantage plans can add or remove providers in their network at any time, and many include prescription drug coverage that should be reviewed.
But government officials and researchers have voiced rising concerns about the way these plans are marketed to more than 66 million Americans covered by Medicare, considering the complexity — and importance — of enrollment decisions.
A new study by KFF, a nonprofit organization focused on health policy, examined 1,200 television ads promoting Medicare that aired during the 2022 enrollment season and found that most had promoted Medicare Advantage plans. Drew Altman, KFF’s chief executive, described the blitz as “annual marketing madness” that can confuse and mislead people trying to make complex choices about their coverage.
The marketing practices of health insurers and brokers included improper inferences that the ads are government-sponsored, and messages urging eligible Medicare beneficiaries not to “miss out” on benefits to which they’re entitled, leaving viewers with the incorrect impression that traditional Medicare is incomplete.
And research by the Commonwealth Fund, a nonprofit research group focused on health care issues, found that as many as 19 percent of Medicare beneficiaries had reported receiving phone calls or seeing ads that would be considered fraud, including offers of “special discounts” for signing up within a certain time frame. Ten percent reported receiving calls asking for their Medicare or Social Security number before plan details would be given.
The Centers for Medicare & Medicaid Services (C.M.S.), which runs Medicare, has moved to strengthen its regulation of plan marketing. Starting with this enrollment season, C.M.S. will require all television ads to be approved in advance and add new messaging standards for all forms of marketing — including direct mail, email and phone outreach.
The effects of the crackdown remain to be seen, said Tricia Neuman, senior vice president of KFF. “We’ll have to wait and see what the ads look like when they start to air,” she said. “In some cases, the guidelines for insurers are fairly clear, but in other cases they may be more ambiguous.”
With that warning in mind, let’s consider the changes you can make to your Medicare coverage during fall enrollment, new federal cost controls on prescription drug plans — and how you can cut through the marketing noise and make smart buying decisions.
What can you do?
If you are enrolled in traditional Medicare (Parts A and B), paired with a Medigap supplemental plan, there’s no need to review that coverage. But Part D and Medicare Advantage selections should be rechecked annually, said Frederic Riccardi, president of the Medicare Rights Center, an advocacy and consumer organization.
“It’s important to look at how your prescription drug coverage may be changing,” he said. “Will your costs go up or down? Will the drugs you’re taking be covered, or will they be on a different tier of coverage? Is a more affordable Part D plan available?”
It’s also possible to switch between Medicare Advantage and traditional fee-for-service Medicare during the fall period. Advantage plans offer lower upfront premium costs because of their all-in-one design, but they generally confine you to in-network providers, whom they are free to add and drop. And this year, some hospitals and health systems are dropping Advantage plans, citing problems with denials of care and slow payment.
Medicare recipients’ out-of-pocket costs in Advantage plans can be substantial in years when their care needs are high. This year, the average out-of-pocket limit is $4,835 for in-network services and $8,659 for both in-network and out-of-network services, according to KFF.
Traditional Medicare offers access to any health care provider who participates in the program. But if you want to switch from Advantage to traditional Medicare, pay careful attention to a critical component you will need: supplemental coverage that protects you from potentially high out-of-pocket costs.
Traditional Medicare has no annual out-of-pocket limit, which could leave you on the hook for thousands of dollars in co-pays and deductibles. Some traditional Medicare enrollees cover these gaps with retiree health coverage from a former employer, and some get it from Medicaid. The other option is a Medigap supplemental policy, which you can buy from an insurance company.
If you are switching to traditional Medicare during fall enrollment, you may have missed the best opportunity to buy a Medigap policy. When you first sign up for Medicare Part B, you have a “guaranteed issue” window that forbids Medigap plans to reject you because of a pre-existing condition. Plans also must offer you the best available premium. This window is open during your six-month Medigap open enrollment period, which starts on the first day of the month that you’re at least 65 years old and enrolled in Medicare Part B.
After that window, Medigap plans can reject applications, with the exception of four states (Connecticut, Maine, Massachusetts and New York) that provide some level of guarantee to enroll at a later time with pre-existing condition protection.
Changes to drug costs
The Inflation Reduction Act, signed into law last year, includes important new controls on the amounts that older people can be required to spend annually on prescription drugs. The spotlight has been on a provision that empowers Medicare to begin negotiating drug prices with pharmaceutical companies — a process that will play out over several years with uncertain results.
But other important changes that will take effect in 2024 and 2025 place caps for the first time on out-of-pocket spending in the Part D program.
In 2024, Medicare will provide relief to people who encounter very high drug costs. The Inflation Reduction Act eliminates a requirement that enrollees pay 5 percent of the cost of drugs when their total spending, with the value of manufacturer discounts on brand-name drugs, exceeds a threshold — $7,750 next year.
That will provide critical savings for older people who have to take costly drugs for conditions such as cancer. “Some patients spend more than $10,000 a year for drugs, even when they have coverage under Part D,” Dr. Neuman said.
Changes in the Part D program under the Inflation Reduction Act will effectively act as an out-of-pocket cap of $3,300 next year, KFF estimates. Dr. Neuman said it was “a big deal that hasn’t gotten a lot of attention.”
In 2025, an across-the-board $2,000 annual cap on out-of-pocket costs for drugs under Medicare Part D will take effect. (This year, a provision of the law that caps patient costs for insulin at $35 a month became effective, along with no cost-sharing for adult vaccines, such as the shingles vaccine.)
Also starting in 2024, the Inflation Reduction Act expands eligibility for Part D subsidies for older people with low incomes. The federal Extra Help program helps beneficiaries with premiums, deductibles and cost-sharing.
“It’s going to make an incredible difference for well over a million people who qualify,” Mr. Riccardi said.
A variety of federal and state programs are available to help low-income people with Medicare costs.
The deluge of marketing makes it especially important to rely on trustworthy, unbiased sources of information. Commonwealth Fund research has found that roughly one-third of Medicare beneficiaries shopping for plans rely on insurance brokers who typically represent only a portion of plan offerings and work on commission; another 20 percent look to family or friends for recommendations.
If you need assistance with plan enrollment, the State Health Insurance Assistance Program offers comprehensive and unbiased guidance. The service is funded by the federal and state governments, and it provides free, unbiased expert help with Medicare. Use the SHIP locator tool online to find the program in your state. And the Medicare Rights Center offers a hotline (800-333-4114) that can counsel people on enrollment.
Begin your shopping by reviewing the Annual Notice of Change that your current plan provider sends each fall. This notice will include the premium you’ll be charged in the coming year and the annual deductible; it will also tell you if coverage of your drugs will change, or if changes are being made to your Medicare Advantage network. You might receive this via email or in the mail.
Use Medicare’s online Plan Finder tool to evaluate options — and don’t limit your search to the premium you’ll pay. It’s important to consider the plan’s deductible and whether it covers all the drugs you take. Plans also can impose coverage restrictions, such as prior authorization, quantity limits or so-called step therapy — that is, requiring you to use a less expensive drug than one that your physician has prescribed.
Many Medicare Advantage plans include prescription drug coverage, so it’s important to understand if that coverage will change in the year ahead. You’ll also want to check on whether the providers you want to use are still included in the network.
Make sure, too, that they’re in the network of any new Advantage plan you’re considering. Providers are listed on plan websites, but these lists can be out of date or inaccurate, said David Lipschutz, associate director of the Center for Medicare Advocacy, a nonprofit group.
“You should always ask about this by phone by calling the plan provider,” he said.
If you want to shift from Advantage to traditional Medicare, check with your SHIP to learn whether you will have the right to buy a Medigap plan during the enrollment period. Search the Plan Finder for available plans; your SHIP also maintains lists of available offerings. And if you don’t live in one of the four states that guarantee your right to buy a Medigap plan, contact insurers directly.
“You can apply to determine if you’ll be able to get a policy,” Mr. Riccardi said.
Finally, the Medicare Rights Center recommends enrolling in new plans directly with Medicare (800-633-4227) in order to protect yourself from any problems with your enrollment.