Medicare vs. Medicare Advantage: sales pitches are often from biased sources, the choices can be overwhelming and impartial help is not equally available to all

The 67 million Americans eligible for Medicare make an important decision every October: Should they change their Medicare health insurance plans for the next calendar year?

The decision is complicated. Medicare has many coverage options, with large and varying implications for people's health and finances, both as beneficiaries and taxpayers. And the decision is consequential — some choices lock beneficiaries out of traditional Medicare.

Beneficiaries choose an insurance plan when they turn 65 or become eligible based on qualifying chronic conditions or disabilities. After the initial sign-up, most beneficiaries can make changes only during the open enrollment period each fall.

The 2024 open enrollment period runs until Dec. 7. Given the complicated nature of Medicare and a scarcity of unbiased advisers, finding reliable information and understanding the options available can be challenging.

We are health care policy experts who study Medicare, and even we find it complicated. One of us recently helped a relative enroll in Medicare for the first time. She's healthy, has access to health insurance through her employer and doesn't regularly take prescription drugs. Even in this straightforward scenario, the number of choices were overwhelming.

The choice is complex, especially when you are signing up for the first time and if you are eligible for both Medicare and Medicaid. Insurers often engage in aggressive and sometimes deceptive advertising and outreach through brokers and agents. But there are unbiased resources to guide you through the process, like www.shiphelp.org.

2 paths with many decisions

Within Medicare, beneficiaries have a choice between two very different programs: traditional Medicare, administered by the government; or Medicare Advantage plans offered by private insurance companies.

Traditional Medicare is a nationally uniform cost-sharing plan that allows people to choose providers for most types of medical care, usually without prior authorization. It has a yearly deductible and coinsurance. After the deductible, Medicare pays 80% of outpatient and medical costs. Traditional Medicare's basic plan, known as Part A and Part B, has no out-of-pocket maximum.

People enrolled in traditional Medicare can buy coverage for prescription drugs from a private insurance company, known as Part D. And they can buy supplemental coverage, known as Medigap, to lower or eliminate the deductible, coinsurance and copayments for Parts A and B and add an emergency foreign travel benefit.

Part D plans run about $0 to $100 a month. People with lower incomes can get Part D Extra Help or state-sponsored pharmaceutical assistance.

There are 10 standardized Medigap plans. Depending on the plan, and a person's gender, location and smoking status, Medigap costs about $30 to $400 a month when a beneficiary first enrolls in Medicare.

The Medicare Advantage program allows private insurers to bundle coverage and offer many options. Compared with traditional Medicare, Medicare Advantage plans typically offer lower out-of-pocket costs. They often include supplemental coverage for hearing, vision and dental, which is not part of traditional Medicare.

But Medicare Advantage plans also limit provider networks, meaning that people can see only certain providers without paying extra. Compared to traditional Medicare, Medicare Advantage enrollees on average go to lower-quality hospitals, nursing facilities, and home health agencies but see higher-quality primary care doctors.

Medicare Advantage plans also often require prior authorization — often for important services such as stays at skilled nursing facilities, home health services and dialysis.

Choice overload

Though options vary by county, the typical Medicare beneficiary can choose between as many as 10 Medigap plans and 21 standalone Part D plans, or 43 Medicare Advantage plans. People who are eligible for both Medicare and Medicaid, have certain chronic conditions, or are in a long-term care facility also have Special Needs Plans to choose among.

Medicare Advantage plans can vary in networks, benefits, use of prior authorization, and enrollee health impacts, including dramatic differences in mortality rates. Researchers found a 16% difference per year between the best and worst Medicare Advantage plans, meaning for every 100 people in the worst plans who die within a year, they would expect only 84 people to die within that year if enrolled in the best plans instead. They also found lower mortality rates for higher-cost plans, but plans with higher federal quality ratings — known as "star ratings" — did not necessarily have lower mortality rates.

Online provider networks can also contain errors or include providers who are no longer seeing new patients.

While many Medicare Advantage plans boast about supplemental benefits, it's often difficult to understand how generous the coverage is. While most Medicare Advantage plans offer supplemental dental benefits, many don't cover root canals. Those that do require some combination of coinsurance, copayments and annual limits.

The trap: Locked out

At 65, when most beneficiaries first enroll in Medicare, federal regulations guarantee that anyone can get Medigap coverage at a standard rate. The plans must cover preexisting health conditions without a waiting period, and as long as a person remains enrolled costs can't rise because of age or illness, although they can go up due to inflation.

Older Americans who enroll in a Medicare Advantage lose that guarantee. This can lock them out of enrolling in supplemental Medigap insurance, making the initial decision a one-way street.

In most states people who switch from Medicare Advantage to traditional Medicare don't have as many protections. Most state regulations permit plans to deny coverage, impose waiting periods or charge higher Medigap premiums based on expected health costs. Only Connecticut, Maine, Massachusetts and New York guarantee that people can get Medigap plans after the initial sign-up period.

Deceptive advertising — and help

Older Americans are also bombarded with ads for Medicare Advantage plans that they may not be eligible for and that include misleading statements about benefits.

A November 2022 report from the U.S. Senate Committee on Finance found deceptive and aggressive sales and marketing tactics, including mailed brochures that implied government endorsement, telemarketers who called up to 20 times a day, and salespeople who approached older adults in the grocery store.

Meanwhile, the number of people enrolled in Medicare Advantage plans has grown rapidly, doubling since 2010 and accounting for more than half of all Medicare beneficiaries by 2023.

The Department of Health and Human Services tightened rules for 2024, requiring third-party marketers to include more federal resources about Medicare, and limiting contacts from marketers.

Federal resources include 1-800-Medicare; medicare.gov; the State Health Insurance Assistance Program, also known as SHIP; and the Senior Medicare Patrol for reporting deceptive marketing.

The SHIP program combats misleading advertising and deceptive brokers by connecting eligible Americans with counselors by phone or in person. SHIP staff say they often help people understand what's in Medicare Advantage ads and disenroll from plans they were directed to by brokers.

Telephone SHIP services are available nationally, but in-person SHIP services are not available in every area.

The key to making a good Medicare coverage decision is to use the help available, look out for yearly plan changes, and weigh your costs, access to health providers, current health and medication needs, and also consider how your needs might change as time goes on.

This article is republished from The Conversation under a Creative Commons license. This is a condensed version. Scan the QR code to read the original article.