Cost Transparency Short-Changed on 2020 Medicare Plan Finder Website

December 13, 2019                                                                               Also see:  2023 Medicare Plan Finder Initiative: Build, Back, Smarter -- 1/3/2022

By Alan Mittermaier

I count myself among the millions of Medicare beneficiaries who endured ads about reviewing 2020 Medicare coverage options during the recent annual enrollment period.  Running 24/7 alongside celebrity pitches by Joe Namath, Mike Ditka and Kelsey Grammer were Medicare-sponsored reminders to visit the updated website that launched October 1st.  What website visitors discover may disappoint, especially when seeking vital out-of-pocket cost details for the popular Medicare Advantage plans.  

Medicare Advantage plans with Part D drug coverage are most attractive to beneficiaries with few chronic illnesses that require costly emergency and specialized care services.  As with older housing and cars, older adults realize that aging is often accompanied with expensive repairs.  Identifying both current and future beneficiary health status (e.g. excellent, fair, poor) is important for anticipating medical and drug cost-sharing incurred by plan enrollees.  Surprisingly, the overhauled website no longer allows comparing plans on estimated annual out-of-pocket medical costs (excluding Part D drugs) by enrollee health status.  Instead, an “Estimated yearly cost” is displayed in each plan’s coverage details with the notation “You may expect to pay this amount for care if you’re in good health.  Actual costs will depend on how much care you wind up using.”  The absence of what constitutes “good health” status or an explanation about how Medicare arrives at an estimated yearly cost figure adds an opaque element to the daunting challenge of evaluating plan options.

Since 2001, when I advised Medicare administrator Tom Scully on disclosing cost-sharing details, has offered beneficiaries shopping for Medicare plans the option to compare estimated annual costs among plans for multiple health status scenarios.  Eliminating this feature creates a transparency barrier for otherwise determining which plans have the most or least favorable benefit design components (premiums, deductibles, copays, maximum annual costs) as an enrollee’s health status declines.  These cost-sharing components are the moving parts that can expose beneficiaries to unexpected out-of-pocket costs.  For example, the most popular $0 premium Medicare Advantage plans typically impose higher office visit, hospitalization and drug copays than plans with affordable premiums. 

Finally, enhanced cost transparency allows beneficiaries to narrow the often overwhelming field of available plans down to a more manageable number from which to choose.  While cost-sharing should not be the sole basis for selecting a Medicare plan, beneficiaries can focus more confidently on other selection factors including provider care networks and drug coverage options.       

Sacrificing out-of-pocket cost transparency on the Medicare Plan Finder only undermines the peace-of-mind that older adults seek.  Medicare administrators should do more to “test, measure, learn” from Medicare beneficiaries and their proxies – family caregivers, agents, brokers, insurance program counselors – who often assist with making insurance decisions.  Never before has cost transparency been so vital to better inform all health care consumers.  Medicare beneficiaries should be no exception.        

Alan Mittermaier is president of HealthMetrix Research Inc. and in Columbus, OH.


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