More Seniors Choosing Alternative to Original Medicare
Growth of private Medicare care plans point to rising customer acceptance and satisfaction
By Taylor Joseph
Miriam Wilks’ appreciation of her Medicare coverage took on a whole new meaning when she received a phone call in April of 2015 from her insurance plan reminding her to schedule a mammogram.
“[They] called me and said, ‘Do you realize it’s been two years since you had a mammogram?’” said the 71-year-old grandmother and UnitedHealthcare Medicare Advantage Plan member from Denver. “They made an appointment right away.”
The mammogram led to an early diagnosis of cancer and a double mastectomy. She credits her health insurance company with saving her life. Because her cancer was caught early, she quickly returned to her favorite activities, like caring for her young grandson and bicycling.
“I’d been very good to go in every year and get my mammogram, but …I forgot to go in,” she said.
The call Wilks received was a routine preventive screening reminder from UnitedHealthcare, a private company that manages her Medicare benefits for her.
Medicare Advantage, a federal program in which private health insurers contract with the government to provide benefits to Medicare beneficiaries, has long been known as a low-cost alternative to Original Medicare – and usually one with some added benefits Medicare does not provide such as vision and dental coverage.
But extra benefits alone don’t account for the growing numbers of Medicare beneficiaries choosing and staying with Medicare Advantage plans in the last five years, say industry representatives.
“Something deeper and more lasting is taking place in how older Americans use their federal health benefits,” said Steve Nelson, chief executive of UnitedHealthcare Medicare & Retirement. “More people are recognizing the value of Medicare Advantage – from care coordination between their health plan and doctors to predictable costs that make it easier to manage their personal budgets.”
In Wilks’ home town of Denver, for instance, nearly half – 46 percent1 – of the area’s Medicare-eligible consumers chose a Medicare Advantage plan.
Nationwide, according to the Centers for Medicare & Medicaid Services, the number of Medicare Advantage enrollees has more than tripled since 2005, to 18.2 million.
Broadly speaking, according to Nelson, there are three primary reasons Medicare beneficiaries might pick and stay with Medicare Advantage: Cost, quality and experience.
The vast majority of Medicare Advantage plans have low or no monthly premiums, in addition to the Medicare Part B premium. Medicare Advantage plans and Original Medicare typically have some cost-sharing for using care – co-pays or co-insurance, for instance. These can quickly escalate if a person gets sick or is injured.
Original Medicare generally covers about 80 percent of beneficiaries’ health care costs, leaving them to cover the remaining 20 percent out of pocket with no annual limit. Unlike Original Medicare, Medicare Advantage plans have annual limits on how much a consumer must reach into their own pocket. This “Maximum Out-of-Pocket” cost is never more than $6,700 a year.
“Medicare Advantage plans can offer seniors good value on their health care dollar and peace of mind by giving them predictability with their costs,” said Nelson. “Even if something unexpected happens, annual out-of-pocket maximums limit the financial impact, a benefit that’s especially important for people living on fixed incomes.”
Health care consumers typically link health care quality with their choice of doctor. The ability to choose any doctor or hospital for care and, by this logic, the best doctor or hospital. Because Medicare Advantage plans have health care provider networks – group of doctors and hospitals who have contracted with the Medicare Advantage plan to provide care for plan enrollees – many consumers feel that being forced to choose an in-network doctor limits their options and they may not be able to access the best possible care.
However, significant changes in how all health insurance plans create and manage their provider networks are causing a revolution in how health care consumers experience the advantage of a network.
“Well-managed health care provider networks are changing how our customers are experiencing health care,” said Dr. Efrem Castillo, chief medical officer of UnitedHealthcare Medicare & Retirement. “Doctors and hospitals connect with each other and with the health plan through a network, with the goal of delivering better health outcomes and a more satisfying experience for patients.”
For instance, UnitedHealthcare provides financial incentives to health care providers who meet or exceed industry benchmarks for health care quality.
“That means the better they treat our members, the better it is for the provider,” Castillo said. “This simple system of rewarding the best-performing doctors in a network aims to make health care work better for consumers.”
As an added boost, the federal government now rates and provides financial bonuses to Medicare Advantage plans that exceed health care quality and customer satisfaction benchmarks. Called the Star Ratings program, this pay-for-performance system means that the best-performing Medicare Advantage plans are able to offer more benefits even as they improve the overall quality of the health care their members receive, Castillo said.
In recent years, private health insurers have invested heavily to improve the experience they provide customers, and Medicare Advantage plans are no exception.
“Our industry doesn’t have the best reputation when it comes to customer experience and satisfaction,” said Nelson. “We are changing that, little by little – and sometimes by a lot.”
For instance, UnitedHealthcare has revamped its customer service operations to make resolving issues and finding the right answer quicker and easier. “We used to rely on our members to do the work,” Nelson said. “But we are turning that dynamic around.”
UnitedHealthcare’s proprietary Advocate4Me service platform uses individual member data on claims and call history to make customer service interactions more relevant and easy. As an example, UnitedHealthcare’s systems can often predict why a customer is calling and match the call to the right agent for their specific need. In addition, agents are encouraged to go beyond the reason for a customer’s call to help members connect with and schedule needed preventive care and screenings– such as Ms. Wilks’ mammogram.
“We’ve turned our customer service agents into advocates for our members,” Nelson said.
Nelson believes this type of easier, more empathetic approach to working with customers is a main reason – even if it is hard to quantify – for more people choosing Medicare Advantage.
“People will gravitate toward health insurance providers who they feel are on their side and in their corner when they need them,” Nelson said. “That level of service is what Medicare Advantage plans provide that Original Medicare doesn’t, and I believe it is a main reason why individuals choose to stay with their Medicare Advantage plan after they enroll.”
Learn more about Medicare Advantage at www.UHCMedicarePlans.com(Opens a new window).
Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies. For Medicare Advantage and Prescription Drug Plans: A Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan’s contract renewal with Medicare. This information is not a complete description of benefits. Contact the plan for more information. Limitations, co-payments, and restrictions may apply. Benefits may change on January 1 of each year.
1Data from the Centers for Medicare & Medicaid Services Medicare Advantage State/County Penetration Report. It excludes U.S. territories and represents April 2011 to March 2016.