By Bruce Japsen
Seniors in progressive U.S. states are choosing private Medicare Advantage plans more so than the national average even as the politicians who want to represent them talk about getting rid of the insurer’s role in health coverage.
New data from the Kaiser Family Foundation shows more than 40% of new Medicare beneficiaries in Oregon and Minnesota chose Medicare Advantage plans in 2016. And more than 36% of new Medicare beneficiaries in New York and California chose Medicare Advantage plans in 2016.
The move toward privatized Medicare plans in Democratic-leaning states like these comes as many candidates for the party’s nomination for President are pushing a single payer version of “Medicare for All” that would bring an end to the private insurer’s role.
With two dozen Democrats running for President in 2020 to challenge Donald Trump should Republicans re-nominate him to run for re-election, the Democratic Party’s candidates are backing everything from a single payer approach to Medicare for All to efforts that allow Americans under the age of 65 to buy into Medicare coverage.
Democratic U.S. Sens. Cory Booker of New Jersey, Kirsten Gillibrand of New York, Kamala Harris of California, Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts were among 17 Senators who introduced the Sanders-led Medicare for All Act of 2017. This legislation, which would expand Medicare more broadly to Americans of all ages, would have no premiums, limited cost-sharing and replaces all private insurance along with Medicaid and the Children’s Health Insurance Program.
Beyond those supporting single payer, others want to see coverage expanded to all through Medicare or a public option. Former U.S. Rep Beto O’Rourke of Texas has said in the past he would support Sanders’ Medicare for All proposal, but lately he’s talking about a more incremental approach to expanding health coverage as has former Vice President Joe Biden who has said he wants to preserve the private healthcare system. And Pete Buttigieg, the Mayor of South Bend, Indiana, is proposing a “Medicare for all who want it” solution that he says would put the U.S. on a path to universal coverage.
The Kaiser Family Foundation analysis seems to indicate those baby boomers who turn 65 and first become eligible for Medicare could be choosing private plans at a higher rate than they are given their experience with the private system.
“Twenty-nine percent of new beneficiaries chose to enroll in Medicare Advantage during their first year in Medicare in 2016,” the Kaiser analysis shows. “That level generally matches the overall share of beneficiaries who opted for Medicare Advantage that year, but does not support the view that the aging Baby Boom generation, having had more experience with HMOs and PPOs during their working years, would select the private plans over traditional Medicare at relatively high rates. In fact, the share of new beneficiaries choosing Medicare Advantage has increased only modestly over the years.”
But the numbers of total Medicare beneficiaries choosing Medicare Advantage is on the rise in the Kaiser study as well as other studies. Medicare Advantage plans provide extra benefits and services to seniors, such as disease management and nurse help hotlines, as well as some plans providing vision and dental care and wellness programs. The plans also are scored by a star-ratings system created under the Affordable Care Act.
Some industry analysts see Medicare Advantage penetration headed to 50% or more of the market in the next five years, particularly after the Trump administration changed regulation to allow Medicare Advantage plans to cover more supplemental benefits. Proponents of Medicare Advantage say enrollment among new beneficiaries if seniors had more education and better understood their options.
“The more educated older adults are about their choices, the more likely they are to make the best choice for themselves,” said Allyson Schwartz,President and CEO of the Better Medicare Alliance, which represents medical care providers and insurers including Humana, UnitedHealth Group, CVS Health and its Aetna health insurance business. “After one or two years in traditional Medicare, as people learn more about their options, they then enroll in Medicare Advantage. Enrollment in MA continues to grow as beneficiaries across the country regardless of political ideology seek lower cost, more benefits, and a coordinated system of care.”
Political battlegrounds like Florida, Georgia, Michigan, Pennsylvania and Wisconsin were states where the share of new Medicare beneficiaries was higher than the 29% national average outlined in the Kaiser study for 2016.
Backers of Medicare Advantage say insurers have attracted more than 22 million people to such plans because of the benefits the plans offer.
“About a third of people eligible for Medicare choose Medicare Advantage because it offers better service, care and value,” America’s Health Insurance Plans (AHIP) spokeswoman Kristine Grow said. AHIP represents several health insurers with Medicare Advantage business including Anthem, Cigna, Centene, Molina Healthcare and WellCare Health Plans.
“About 6 million of them are seniors who make less than $20,000 a year – many of whom might not be able to afford the out-of-pocket costs of traditional Medicare,” Grow added. “Medicare Advantage helps enrollees save money by capping out of pocket costs, offering additional benefits that traditional Medicare doesn’t cover, and for many plans including comprehensive drug coverage at no additional cost.”