Poll: Older Michiganders give Medicare little thought. That’s risky

Michiganders have fewer Medicare Advantage options this year as insurers exit the market
Those who fail to replace those plans may end up facing 20% of their medical costs when they are forced into trimmed-down Original coverage without Medigap options
Open enrollment for Medicare continues until Dec. 7

Choosing a Medicare plan is one of the most important health care decisions for 2.3 million Michiganders, yet 3-in-5 of them spend less than an hour — or no time at all — comparing their options, according to a new poll.

This year, that lack of attention could be especially risky, experts say, as insurers pull out of the Michigan market, leaving countless Michiganders without the plans they’ve come to rely on to cover bills from routine doctors’ visits, hospitalizations and prescription drugs.

More specifically, Michiganders whose Medicare Advantage plans have been discontinued may be forced to find an alternative among fewer options this open enrollment period, which extends to Dec. 7.

But there’s good news for them, as well:

Because their plan is discontinued, they get a rare — but brief — option to leave Medicare Advantage and revert to Original Medicare, known as Parts A and B, alongside a Medigap plan, which supplements the coverage of Original Medicare.

Still, they have just 63 days after their plan ends — until the first week of March if their plan ends Dec. 31 — to be guaranteed a Medigap plan with a price that isn’t based on their health history.

RELATED STORIES:

Original Medicare typically covers just 80% of hospital and medical costs. Medigap plans close that gap.

Leaving Medicare decisions to the last minute could mean choosing a plan that leaves money or benefits on the table, said Geoffrey Hoffman, an associate professor at the University of Michigan School of Nursing.

Hoffman, who studies Medicare enrollees’ decision-making, worked with the team at the National Poll on Healthy Aging from the U-M’s Institute for Healthcare Policy and Innovation.

A man poses for a photo — Failing to reconsider Medicare options each year could cost beneficiaries hundreds or thousands of dollars, said Geoffrey Hoffman, an associate professor at the University of Michigan School of Nursing who studies Medicare. (Courtesy of Geoffrey Hoffman)

The choices in Medicare can be overwhelming, he said.

Unlike younger adults who may get insurance through their employer, older Michiganders may face a dizzying array of plan choices at the same time health is getting less certain. Moreover, the groceries, gas and other household necessities continue to eat into a fixed income for many older residents.

Make “the wrong choice and end up overpaying by several hundreds or thousands dollars more,” Hoffman said.

Losing Advantage

Insurers are offering 181 Advantage plans in Michigan this year, down from 192 plans last year, according to the US Centers for Medicare and Medicaid Services.

Advantage plans, known as Part C, cover the medically necessary services that Original Medicare covers, but Advantage plans may offer extra benefits such as vision, hearing and dental services.

It’s not immediately clear how many Michiganders were covered by the Advantage plans that are exiting Michigan. Last year, about 3 million Medicare Advantage enrollees throughout the US found themselves in plans that were discontinued, and experts say those numbers will increase this year.

Those beneficiaries whose plans are ending have additional decisions to make.

They can find an alternative Advantage plan.

This year, the average monthly premium in Michigan for an Advantage plan is $16.21, according to the Centers for Medicare and Medicaid Services. That adds to the cost of the required medical insurance under Part B, which typically costs $202.90 a month.

Those beneficiaries whose Advantage plans are ending also can revert to Original Medicare, which generally leaves beneficiaries footing 20% of their medical bills.

They can pick a Medigap plan to help cover those bills.

It’s a rare opportunity for Michiganders who chose to skip Medigap earlier. Typically, a Medicare beneficiary must choose Medigap coverage the first year they enroll in Medicare.

After that, Medigap plans are subject to underwriting. In other words, the insurer can adjust the monthly premiums based on a person’s health — making it unaffordable.

But Michiganders whose Advantage plans are discontinued get a second chance at enrolling in Original Medicare with a Medigap policy. They have 63 days after the end of their Medicare plans to choose a Medigap policy without being subject to underwriting.

Like Advantage plans, the prices of Medigap plans vary by county. They averaged $235 last year in Michigan, according to the health research nonprofit KFF in San Francisco.

And finally?

Original Medicare doesn’t cover prescription drugs, so experts say those with Original coverage only should consider a Part D Medicare plan, also known as a “drug plan.”

Plans vary not only on cost but on the drugs they cover.

In Michigan, there are 11 standalone drug plans this year.

Free assistance

Beneficiaries can consult the Medicare Plan Finder to compare costs and coverage lists of Medicare Advantage, Part D prescription drug plans and Medigap plans in their area, incorporating specific drugs they take and the doctors they see in their search.

Medicare also provides a hotline at 1-800-MEDICARE, or 800-633-4227.

Free counseling is available through the federally funded State Health Insurance Assistance Program that’s available in every state. In Michigan, it’s called MI Options, and it offers help in-person or by phone at 800-803-7174.

Insurance brokers can help, although they may earn commissions from insurance companies based on how many people they sign up.

Thank you to our Michigan Health Watch Sponsors

Bridge Michigan Health Watch is made possible by generous financial support from our sponsors. Sponsorship supports our independent journalism mission but does not constitute sponsor endorsement of individual articles or editorial content. Bridge Michigan journalism remains fact- and data-driven and independent at all times.

Please visit the About page for more information and to subscribe to Health Watch. Interested in becoming a sponsor? Contact Emma Carr.