Navigating Medicare: What Minnesotans need to know

On Oct. 15, Medicare's open enrollment period begins amid market turmoil. Health systems in Minnesota are part of a nationwide trend in which shrinking profits have led some to drop Medicare Advantage plans.

More than 1 million Minnesotans are Medicare beneficiaries. The health insurance program is for anyone ages 65 and older and younger adults with long-term disabilities. But choosing a Medicare plan this year can be an even bigger decision than before.

Here is what to know:

What is Medicare Advantage and how does it differ from traditional Medicare?

There are two main ways to get Medicare, either through traditional Medicare or Medicare Advantage.

The biggest difference between the two is that traditional Medicare is a federal government health insurance program. Medicare Advantage plans are private health plans, sold by insurance companies. Both options provide coverage for major medical needs.

Traditional Medicare has standardized deductibles, copays and coinsurance and may cost more than a Medicare Advantage plan each month because they tend to cover more services.

Some people purchase private Medicare supplement insurance called a Medigap policy to help pay for out-of-pocket costs.

Health care providers throughout the country accept traditional Medicare. People with traditional Medicare policies have maximum flexibility to see any doctor accepting Medicare, anywhere in the U.S., without a referral or prior authorization.

Medicare Advantage generally has a lower premium but higher out-of-pocket costs each month. This plan may be more suitable for a person who does not often use health care services.

Additional benefits like vision, hearing, dental and an annual physical exam or gym memberships are also options and are not available through traditional Medicare. However, Medicare Advantage plans have a preferred provider network, so their enrollees are limited in which doctors and hospitals they can go to for care.

How do I know which type of plan is right for me?

According to an analysis by KFF, 54 percent of eligible Medicare beneficiaries are enrolled in Medicare Advantage. About 600,000 Minnesotans are on Medicare Advantage plans, compared to around 230,000 enrolled in traditional Medicare.

Kelli Jo Greiner, Medicare product manager at the Minnesota Board on Aging, said there has been a huge increase in the growth of these plans in Minnesota as well.

Greiner said a Medicare Advantage plan can be the right option for people if they can afford the out-of-pocket cost. She also said customers should study the options and make a decision based on cost, prescription drug coverage and provider network.

"If people are snowbirds and they leave the state for several months, Medicare Advantage may not be the best option," Greiner said. "They need to find out what the coverage is going to be, because if they use providers outside of the network, their cost sharing is going to be much higher."

How much are Medicare and Medicare Advantage plans?

It is not unusual for traditional Medicare premiums with a Medigap policy to be $200 or more per month, but they offer the flexibility of being able to see any Medicare provider in the country.

In 2025, there will be one hundred Medicare Advantage plans in Minnesota to choose from. Some plans will have very low-cost premiums, and others charge up to $200 a month.

Why are providers and hospitals dropping Medicare Advantage plans and how does this affect me?

Health systems and providers across the country cite low reimbursement rates, complicated billing processes and excessive pre-authorization requirements among the reasons to drop Medicare Advantage plans.

A 2022 U.S. Department of Health and Human Services watchdog report said private companies offering Medicare Advantage plans delayed or denied access to benefits for medically necessary services and claims that should have been paid were frequently rejected. When insurers refuse to pay claims on medical services that patients can't afford, providers might end up footing the bill, leading them to not accept plans.

In Minnesota, providers are raising similar concerns. "We've never seen anything like this," Greiner said. "It's not a good thing and right now it's going to affect 60,000 Medicare beneficiaries in Minnesota and that is a lot of people."

As of now, providers are still participating in Medicare Advantage plans, but some health systems and hospitals are ending their contracts. These changes will take effect on Jan. 1.

Greiner said most Medicare beneficiaries do not look at their options and choose to stay with their current plan. This year, that could be a big mistake, given the number of providers that are leaving Medicare Advantage plans.

"Starting in January, they're going to have to find a new provider and not be able to see the one they have an established relationship with. And, it's possible their prescription drugs will no longer be covered, and costs will have gone up quite a bit from what they are this year," Greiner said.

When can I enroll in a Medicare health plan?

Open enrollment for traditional Medicare runs from Oct. 15 through Dec. 7. During this period, people can either sign up for Medicare or make changes to their existing health plan and prescription drug coverage, which go into effect on Jan. 1.

Medicare Advantage open enrollment, which is only for those currently enrolled in Advantage plans, starts Jan. 1 and goes through Mar. 31.

Members can switch to a different Medicare Advantage plan or disenroll from their current plan and return to traditional Medicare. Coverage starts the first of the month after the health plan insurer gets the request.

This is the time to review Medicare benefits and determine what plan is best based on overall costs, whether doctors and other providers are in-network, prescription drug coverage options, and what additional coverage is needed, like vision, hearing and dental care.

How can I find out more?

The Medicare Plan Finder Tool at www.medicare.gov will narrow down plan options by specific prescription drugs, in-network pharmacies, out-of-pocket costs and the price of overall coverage.

If a provider network is not showing up in the Plan Finder Tool, beneficiaries can call their specific plan or go to the plan's website to see if their provider participates.

For more assistance, call 1-800-Medicare or contact the Senior Linkage Line at 1-800-333-2433 which provides Medicare counseling.