Medicare shoppers find $0 premium plans

October 1, 2018

Medicare beneficiaries getting their first detailed look today at 2019 health plan options are seeing a lot more zeros as in health plans with no monthly premiums.

The federal government on Monday let insurers begin marketing detailed health plan options for next year, when more than a quarter million Minnesotans will need to find new coverage due to a change in federal law.

Five health insurers next year will sell $0 premium plans in Minnesota up from one carrier currently while two others companies will sell coverage with monthly premiums below $30, according to a Star Tribune review of federal data.

While a health plan with no premium might sound good, state officials caution that consumers should read the fine print on out-of-pocket costs with the coverage as well as which doctors and hospitals are in the health plans network.

There will be more premium-free plans, said Kelli Jo Greiner, health policy analyst with the Minnesota Board on Aging. What people need to understand is, with not paying a premium, it means that your cost-sharing is probably going to be higher in terms of deductibles, coinsurance and copays.

There are several other things they need to look at, Greiner added. What is their out-of-pocket cost going to be? Does their [health care] provider participate with that plan? Does their pharmacy participate, and are their drugs going to be covered? Because some of these are Medicare Advantage plans that are going to include Part D?

This years annual shopping season for Medicare coverage is unusual because an estimated 320,000 Minnesotans with Medicare Cost health plans must switch to a new policy because a federal law is eliminating the coverage next year across much of the state.

Through summer and early fall, insurers and the government have been sending a series of letters to beneficiaries in Minnesota about the transition. While health plans have already increased general marketing efforts, the detailed pitches start today including hundreds of information sessions scheduled across the state.

Plan details are available starting today at the Medicare.gov website. People cant sign up for a plan until Oct. 15, when the open enrollment period officially begins. The period ends Dec. 7 for all beneficiaries, although it will stretch to Feb. 28 for those currently enrolled in Cost plans in the 66 Minnesota counties where the coverage is going away. Theres a slightly longer transition period for people in Cost plans who want to switch to the Original Medicare plan and also buy a Medigap supplemental policy.

Cost plans are sold by only three insurers Blue Cross and Blue Shield of Minnesota, HealthPartners and Medica under the brands Platinum Blue, HealthPartners Freedom and Medica Prime Solution. For years theyve been sold alongside products from health insurers Humana and UCare that actually are Medicare Advantage (MA) plans, a somewhat different type of coverage.

All five companies are selling Medicare Advantage plans for 2019 in addition to two newcomers: St. Louis Park-based Allina Health and Aetna Insurance Company; and Minnetonka-based UnitedHealthcare.

The distinction between Cost and Advantage health plans is lost on most consumers, since in both cases enrollees opt to receive their Medicare benefits via private insurers. One of the key differences is how insurance companies that sell the different plans get paid by the government a technical detail that helps explain the shift away from Cost plans.

A federal law passed in 2003 created a competition requirement for Medicare Cost plans, which stipulated the plans could not be offered in service areas where there was significant competition from Medicare Advantage plans. Congress delayed implementation until a law passed in 2015 called for the rule to take effect in 2019.

The governments push to sunset the Cost plans reflects a bipartisan push to simplify the administrative structure in Medicare while having insurers take financial responsibility for managing health care use by enrollees, health policy experts say.

Roughly 20 million people are covered through Medicare Advantage plans, while only about 630,000 people had Cost plans in June and most of those beneficiaries were Minnesotans.

In Minnesota, Cost plans will survive in 21 counties where they dont face much competition from Medicare Advantage plans. That includes St. Louis County and much of the states northeast corner.

Cost plans will be eliminated for an estimated 320,000 people in 66 counties, including Hennepin, Ramsey and others in the Twin Cities metro.

While things like zero-premium plans and health insurer marketing efforts will put a lot of attention on Medicare Advantage plan options, consumer advocates say beneficiaries shouldnt lose sight of Medigap supplements that might be a better fit for some, even though many come with higher premiums.

Our goal is to help people understand what all of their options are including the Medigap policies, Greiner said.

While zero-premium policies are being sold for 2019 by five insurance companies, the coverage in many cases is being offered only in certain counties. Across the country, zero-premium plans have been very popular, according to data from the federal Centers for Medicare and Medicaid Services.

About 46 percent of enrollees are in Medicare Advantage plans that will continue to have a zero premium for 2019, the government says, adding that the number of zero premium enrollees is projected to increase by more than 1.2 million.

Christopher Snowbeck 612-673-4744 Twitter: @chrissnowbeck

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