Believe it or not, we’re approaching the mid-point for Medicare open enrollment this season – and we suspect you still have plenty of questions. As we’ve been saying for the past several weeks, this is a turbulent year for open enrollment. The Inflation Reduction Act and related changes sparked a cascade of adjustments in premiums and covered services among Medicare insurers, not to mention the outright cancellation of coverage by some companies in some markets.

An unusually fraught open enrollment season indeed!

One of the key choices beneficiaries will have to make is between highly-advertised Medicare Advantage plans and the Medicare-plus-Medigap option. Just a week ago, the New York Times published this article in which reporter Paula Span attempts to analyze that important choice objectively. Because the New York Times is generally considered one of the nation’s most reputable journals, let’s take a look at Span’s explanation of the pros and cons.

(Please note that a subscription may be required to access the full New York Times article.)

Open Enrollment Brings Plenty of Noise but Little Clarity

“It’s open enrollment season again,” Span begins. “From now through December 7, more than 67 million Americans are facing the annual question of which Medicare options will provide the best health coverage. An onslaught of television and radio ads, emailed promotions, texts and mailers serve as reminders, though not necessarily clarifying ones.”

For her article, Span spoke with Dr. Jeannie Fuglesten Biniek of KFF, formerly the Kaiser Family Foundation.  “It’s a very consequential decision, and the most important thing is to be informed,” she told Span.  Dr. Fuglesten Biniek is co-author of a recent literature review published by KFF which compared Medicare Advantage plans and traditional Medicare.

MA Plans Change Annually, Not Always for the Better

Part of the issue, Span writes, is continual change. With Medicare Advantage, “every year, plans can change their benefits, some in a more generous direction, many in a less generous way,” Dr. Fuglesten Biniek said. As Span adds, “For 2025, some insurers are offering fewer plans, after several years of adding many more. That’s even more true than usual this year as the industry adapts to new federal regulations, especially for drug coverage under Part D plans.”

These changes will affect different areas in different ways. Normally, if a plan is cancelled, beneficiaries can switch to another offered by the same insurer. “But,” says the Times, “a few insurers — Mutual of Omaha, for instance — are leaving Medicare Advantage altogether.” Some places, notably in parts of Kansas, Nebraska and Oregon, will end up without a Medicare Advantage option at all and will have to shift to traditional Medicare, along with Part D and Medigap insurance.

Marketing Barrage Pays Off for MA Insurers

As Span explains, Medicare has been in place since 1965. Since then, an expanding array of Medicare Advantage plans, first authorized in 1997, has become available. For 2025, the average enrollee can select from 34 Medicare Advantage plans. This is down from 36 a year ago.

Like traditional Medicare, MA plans are funded by the federal government, Span writes, but they are offered through private insurance companies. These firms receive a set payment for each enrollee. “The idea,” says Span, “is to help control costs by allowing these insurers, which must cover the same services as traditional Medicare, to keep some of the federal payment as profit if they can provide care less expensively.”

Several studies, most recently this analysis from KFF, have pointed to Medicare Advantage marketing practices that were deceptive or misleading. “Medicare has issued regulations to reduce the confusion,” says Span. “But the marketing blitz has paid off for insurers. The proportion of eligible Medicare beneficiaries enrolled in Medicare Advantage plans has hit 54 percent, an all-time high.”

Choice of MA versus Medicare Brings Major Consequences

The choice between Medicare Advantage and traditional Medicare can’t be taken lightly.  “The programs operate quite differently,” says the New York Times, “and the health and financial consequences can be dramatic.”

In her study for KFF, Dr. Fuglesten Biniek found very little difference in satisfaction between those under MA plans and those with other coverage. “Both Medicare Advantage and traditional Medicare beneficiaries reported that they were satisfied with their care — a large majority in both groups,” she told reporter Span.

MA Plans Appear to Offer Simplicity, Lower Cost

Span explains one of the key arguments in favor of Medicare Advantage plans: simplicity. Dr. Fuglesten Biniek calls MA plans “one-stop shopping” where the drug plan is included. By contrast, traditional Medicare beneficiaries often buy supplemental insurance called Medigap policies, to cover out-of-pocket expenses like deductibles and coinsurance.

Medicare Advantage also seems cheaper when comparing monthly premiums. Some MA plans actually offer no premium at all. Another plus is that Medicare Advantage plans cap out-of-pocket costs – a benefit that is not part of stand-alone Medicare coverage but is included with most Medigap policies.

“Advantage enrollees may also be drawn to the plan by benefits that traditional Medicare can’t offer,” Span writes, especially vision, dental and hearing benefits.  “Many plans also include gym memberships, transportation or certain over-the-counter items, though some are now scaling back such extras.” But these benefits might turn out to be less generous than they’re perceived to be, a factor that requires looking past the hype.

Biggest Downsides to MA: Limited Network, Care Restrictions

So, if MA plans are cheaper and simpler, with added features, what’s the downside? The biggest drawback, say experts, is that Medicare Advantage plans control costs by restricting care: you can only see a limited group of in-plan providers, and the companies control how much care you receive.

“One big disadvantage,” Span explains, “is that insurers require ‘prior authorization,’ or approval in advance, for many procedures, drugs or facilities.” Some studies show that causes some patients to have their care delayed. Plans can also have restrictive policies that override your own doctor’s recommendation.

David Lipschutz, co-director of the Center for Medicare Advocacy, spoke with Span about this limitation of MA plans. “Your doctor or the facility says that you need more [rehabilitative] care,” he said — “but the plan says, ‘No, five days, or a week, two weeks, is fine.’” When that happens, patients must either pay out-of-pocket or skip the extra care.

Span adds that there is an appeals process, and in 2022 83 percent of appeals were granted, according to an analysis by KFF. But only about 10 percent of beneficiaries or providers actually filed appeals. “A report in 2022 by the inspector general’s office of the Department of Health and Human Services determined that 13 percent of services denied by Advantage plans met Medicare coverage rules and would have been approved under traditional Medicare,” Span states.

Traditional Medicare: Broader Coverage at Higher Costs

“The big pro [with traditional Medicare] is that there are no networks,” according to Dr. Fuglesten Biniek of KFF. “You can see any doctor that accepts Medicare.” That applies to most doctors and clinics. Span adds that traditional Medicare beneficiaries “largely avoid the delays and frustrations of prior authorization requirements.”

The downside is cost. Traditional Medicare, as the article explains, does not cap out-of-pocket expenses, so patients confronted with a 20 percent co-pay for hospitalizations or tests can face a major burden of medical bills. Thart’s why most people on traditional Medicare purchase a supplemental Medigap policy to cover out-of-pocket expenses. However, Span writes, “Medigap policies are not inexpensive; in 2023 they averaged from $191 to $267 a month, KFF reported.”

Most experts believe traditional Medicare is better for patients with greater need for care. “When you’re healthier, you may run into fewer of the limitations of networks and prior authorization,” one said. “When you have more complex needs, you come up against those more frequently.”

Big Changes to Drug Plans for 2025

We’ve talked and written at some length about changes to Part D drug coverage for 2025, so we’ll summarize what the New York Times has to say.

According to Paula Span, the “major policy shifts affecting Medicare Part D…“make comparison shopping especially important in 2025.”  This warning applies regardless of whether you choose Medicare Advantage or traditional Medicare. “Advantage plans usually include drug coverage; in traditional Medicare, you must buy a separate Part D plan. But the changes will affect both,” Span writes.

First off, the Biden administration’s Inflation Reduction Act caps out-of-pocket drug payments at $2,000. “Moreover,” Span says, “the law mandates that after beneficiaries reach the $2,000 cap, insurers must now pay 60 percent of remaining drug costs, up from 20 percent.” This gives insurance companies a stronger incentive to control costs by “increasing premiums or deductibles, reducing benefits and changing formularies.”

The New York Times article goes into great detail about drug-related premiums and deductibles which we lack the space to cover here. Open enrollment is the time to make sure that the drugs you take are still covered on the plan you choose. You should also confirm that your preferred pharmacy is on the “preferred” list under your plan so you’ll generally pay a lower price.  Formularies and in-network pharmacies can change from year to year, so this isn’t the year to presume that everything is the same as it was a year ago.

What If I Want to Switch Plans Later On?

For those asking if they have the power to switch plans after open enrollment, Span has a simple reply: “You can,” she says, “but be careful.”

It’s simple to switch between Medicare Advantage plans – in fact, there’s even a special Medicare Advantage open enrollment period each year in January, February, and March. But if you want to switch from traditional Medicare to an Advantage plan, look out.

“You relinquish your Medigap policy, if you had one,” says Span. “Then, if you later become dissatisfied and want to switch back from Advantage to traditional Medicare, you may not be able to replace that policy. With some exceptions, Medigap insurers can deny your application or charge high prices based on factors like pre-existing conditions.” Only four states currently guarantee the right to purchase Medigap insurance at set prices: New York, Massachusetts, Connecticut and Maine.

Make the Best Choice with the Right Advice

The New York Times article ends with some helpful tips and links.

“You will find plenty of information on the Medicare.gov website, including the Part D plan finder, where you can input the drugs you take to see which plan gives you the best, most economical coverage. The toll-free 1-800-MEDICARE number can also assist you,” Span writes.

“Perhaps the best resources, however, are the federally funded State Health Insurance Assistance Programs, where trained volunteers help consumers assess both Medicare and drug plans,” she adds. David Lipschutz, co-director of the Center for Medicare Advocacy, says these programs are “unbiased and don’t have a pecuniary interest in your decision making.”

(Note that in Washington State, home to AgingOptions and Life Point Law, the program is called Statewide Health Insurance Benefits Advisors (SHIBA) and is part of the Office if the Insurance Commissioner.)

Remember, however, that appointments with a volunteer advisor tend to fill up quickly at this time of year.  With open enrollment period ending on December 7, the message is clear: Don’t delay.

(originally reported at www.nytimes.com)