We have all been inundated with advertisements begging seniors to call some hotline to see if they are eligible for "extra" Medicare benefits. Those advertisements are for enrollment in Medicare Advantage plans. Enrollment in theses plans has grown substantially in the past few decades. For more than half of all eligible people, the promise of low premium costs and perks like dental and vision insurance seem like a great deal. And as the private plans' share of the Medicare patient pie has ballooned to 30.8 million people, so too have concerns about the insurers' aggressive sales tactics and misleading coverage claims.
Enrollees who sign on when they are healthy can later find themselves trapped as they grow older and sicker. In an article in Fortune Magazine, Christine Huberty, a lead benefit specialist and attorney for the Greater Wisconsin Agency on Aging Resources recently states that it is "one of those things that people might like them on the front end because of their low to zero premiums and if they are getting a couple of these extra benefits — the vision, dental, that kind of thing." But, she continued, " when they actually need to use it for these bigger issues people realize, ‘Oh no, this isn't going to help me at all.'”
Medicare pays private insurers a fixed amount per Medicare Advantage enrollee and, in many cases, also pays out bonuses, which the insurers can use to provide supplemental benefits. The extra benefits work as an incentive to make the plans irresistible, but later enrollees often find that the plans “restrict the access to so many services and coverage for the bigger stuff,” said Huberty.
Researchers at the Brown University School of Public Health analyzed 10 years of Medicare Advantage enrollment and found about 50 percent of the beneficiaries switched out of their Medicare Advantage contract within five years. The majority switched to another Medicare Advantage plan rather than traditional Medicare. In the study the authors mused that switching plans could be a positive sign of a free marketplace but that it may also result from a general discontent with Medicare Advantage.