CHICAGO (Reuters) – Insurance companies do not need any help marketing Medicare Advantage plans – just ask anyone over age 65 about the pitches that clog their mailboxes every year during the fall enrollment period, or check out the television ads that flood cable channels.
FILE PHOTO: Pharmaceutical tablets and capsules are arranged in the shape of a U.S. dollar sign on a table in this picture illustration taken in Ljubljana August 20, 2014. REUTERS/Srdjan Zivulovic/File Photo
So why is the federal government giving these private all-in-one plans an extra marketing push? That is the question raised by two consumer advocacy groups, who charge that the Centers for Medicare & Medicaid Services (CMS) is improperly urging enrollees to pick Advantage plans in ways that tip the scales against traditional fee-for-service Medicare.
Medicare Advantage plans roll together coverage for hospitalization, outpatient services and prescription drugs that are provided through separate parts of traditional Medicare. In
a letter sent last month to CMS Administrator Seema Verma, the Medicare Rights Center and the Center for Medicare Advocacy criticize a suite of online tools on the Medicare website that aim to help consumers decide between Advantage and traditional Medicare. The tools make “overly-broad suggestions” that encourage Advantage enrollment when “more nuance is required, and by failing to present individuals with the full array of Medicare coverage options,” the letter states.
The consumer groups also say that a CMS email campaign during fall enrollment (which ends on Dec. 7) is improperly biased toward Advantage plans. The campaign includes messages with subject lines such as “Could Medicare Advantage be right for you?” and “Get more benefits for your money,” and contain messages such as “check out Medicare Advantage.”
CMS did not respond to requests for comment on perceptions that its Advantage promotions lack balance, or who it regards as the target audience.
This is not the first time CMS has been accused of bias in favor of Advantage. Earlier this year, advocacy groups called foul over language contained in a draft of the 2019 Medicare handbook that CMS sends to enrollees every year. (reut.rs/2J6D9l1) CMS later responded by fixing the language in the final draft of its handbook “Medicare & You.”
Advantage plans differ from traditional fee-for-service Medicare in several ways. They receive capped per-enrollee payments from the federal government, rather than the fee-for service model used in the traditional program. Advantage plans must cap enrollees’ out-of-pocket expenses; and most wrap in prescription drug coverage. Beneficiaries typically must use a network of providers, while enrollees in traditional Medicare can see any healthcare provider that accepts Medicare – and most do.
Advantage plans often save money for enrollees on premiums, since most pay no additional fee for prescription drug coverage and do not need Medigap supplemental policies, which cap out-of-pocket costs.
And the business is doing just fine without cheerleading by CMS. Enrollment has more than tripled since 2005 to 20 million beneficiaries, according to the Kaiser Family Foundation. The Congressional Budget Office projects enrollment will rise from 34 percent to 42 percent of the Medicare population by 2028.
The companies running plans are enjoying a boom in revenue – for example, UnitedHealth Group Inc, the nation’s largest seller of Medicare Advantage plans, reported a 15.2 percent revenue jump in its Medicare business during the third quarter compared with the year-earlier period, to $18.8 billion.
The Trump administration is not the first to play the role of Advantage booster. “The past few administrations have been very much in favor of private plans,” said Gretchen Jacobson, associate director with the Kaiser Family Foundation’s Program on Medicare Policy. She notes that the administrations of Barack Obama and George W. Bush, as well as Congress, have encouraged growth of the program through rulemaking and legislation that made it possible for Advantage plans to add benefits such as vision care and gym memberships, and to cap patient out-of-pocket costs. At the same time, regulators have given Advantage plans greater latitude to set their own rules for certain types of coverage.
But the current round of government support for Advantage plans is louder than anything seen in earlier administrations, said Joe Baker, president of the Medicare Rights Center. “I’ve been involved in Medicare since 1994, and I can’t remember this kind of government promotion for a particular part of the program,” he said.
Baker adds that his group has no problem with CMS providing education to consumers – but only if it is balanced. “People have two options, and CMS should be communicating about the advantages and disadvantages of both – this approach is lopsided.”
The motivations are not clear, Jacobson said. A research paper she co-authored recently in the New England Journal of Medicine (bit.ly/2ARMyqo) concludes that evidence is mixed as to whether Advantage saves the government money or is actually increasing government spending.
The jury also is out on the quality of care provided by Advantage plans, Jacobson’s study found, especially for people with serious chronic conditions. These patients are disenrolling from Advantage plans at high rates, according to numerous rigorous research studies. “That is a real concern as Advantage enrollment grows,” she said.
Reporting and writing by Mark Miller in Chicago; Editing by Matthew Lewis