It’s a popular assumption that more choice is a good thing when it comes to health care and health insurance. But a 2011 study demonstrates that the array of choices for Medicare enrollees have is making it difficult for seniors to make the best choice for them.
A Medicare maze
The study, performed by researchers from Harvard Medical School’s Department of Health Care Policy, focuses on what are called Medicare Advantage plans. Medicare Advantage plans give seniors the opportunity to get coverage without enrolling directly in Medicare. These plans are offered by private insurers that receive money from Medicare in exchange for providing coverage to Medicare-eligible seniors. The variety of Medicare Advantage plans allows seniors to choose plans that fit their needs and avoid the one-size-fits-all Medicare approach.
The problem, according to the study, is that elderly patients — especially those with limited mental capacity — are bewildered by the number of options. They often become overwhelmed and simply rely on the default option: traditional Medicare.
According a news release about the study, a 2003 law called the Medicare Modernization Act boosted payments to Medicare Advantage programs, which prompted an explosion of Medicare Advantage plans. In general, researchers found, seniors preferred these plans — but only if the number of options available to them was less than 15. When the number of choices went above 30, however, fewer seniors opted for a Medicare Advantage plan, instead choosing regular Medicare coverage.
Unfortunately, according to the researchers, seniors with limited brain capacity are the least able to navigate the sophisticated system of Medicare Advantage choices, even though they have the most to gain from these custom plans.
Medicare Advantage basics
Medicare Advantage plans are offered by private companies that go through an approval process conducted by Medicare. A single Medicare Advantage plan will provide health insurance and prescription drug coverage.
There are a variety of Medicare Advantage plans available, including:
- Preferred provider organization (PPO) plans: The patient can get care from any health care provider in the insurer’s network.
- Private fee-for-service plans: There is no network. The patient can seek treatment from any doctor. But that doctor needs to accept Medicare’s terms, conditions and reimbursement rate — and not all doctors will.
Special needs plans: These plans are designed for patients with serious, chronic illnesses or extremely low income. The plan’s network includes doctors who specialize in treating chronic conditions.