January 6, 2024
Why Do Medicare Advantage Plans Fail in Addressing Member Cost-Sharing Transparency?
Question: Where do informed Medicare-eligibles find the 2024 Medicare Advantage+Part D plans that offer the most favorable member cost-sharing and benefit value especially when their health declines and benefit utilization increases?
I can attest (as a 74 year-old Medicare Advantage member who attends multiple Medicare plan events every fall) that Medicare plans get failing grades on educating their target audiences -- members, caregivers, prospective members -- about their benefit limits and cost-sharing. Aside from typically identifying maximum annual out-of-pocket cost limits and Part D drug cost-sharing tier structure, event presenters offer little else to address how true out-of-pocket costs are driven by declining health status and increased utilization of plan benefits. This creates a 'cost-sharing expectation gap' when plan members are surprised to discover their out-of-pocket costs exceed their expectations.
So why do Medicare Advantage plans fail in addressing member cost-sharing transparency?
- Too many ‘moving parts’ that can confuse or snooze target audiences. Plan representatives prefer focusing on one-dimensional cost-sharing information highlighting premiums and Part B givebacks, co-pays, drug tiers, extra value benefits (fitness memberships, eyewear, hearing aids, dental care), supplemental benefits (OTC product allowance, transportation, meal delivery, grocery allowance). Introducing cost-sharing scenarios based on attendees' self-described health status becomes challenging except in one-on-one encounters with plan representatives.
- Medicare.gov Plan Finder (MPF) abandoned its annual healthcare cost-sharing estimates across multiple health status categories after CY 2019. Consequently, few Medicare Advantage plans see the value in bothering to offer similar comparisons. Interestingly, CMS failed to generate sufficient visitor interest for its MPF multiple health status cost-sharing comparisons to justify the underlying database configuration costs. Presently, MPF visitors can shop and compare only Part D drug cost-sharing.
- CMS Medicare Communication Marketing Guidelines (MCMG) sanction risks. Compliance officer fear of false claim marketing sanctions and/or fines possibly resulting in a ‘death sentence’ is a significant deterrent to improving cost-sharing transparency. The recent Congressional hearings on misleading, fraudulent Medicare Advantage advertising practices puts the spotlight on protecting beneficiaries but, as yet, not on improving transparency to close the 'cost-sharing expectation gap'.
- Adverse selection risk. This is the elephant in the room given that Medicare Advantage plans cannot underwrite or deny enrollment to Medicare beneficiaries for pre-existing conditions. Consequently, Medicare Advantage products representing the best overall benefit value regardless of health status may attract more high-risk, sicker beneficiaries who potentially threaten medical-loss ratios even after accounting for health risk-adjusted payments.
Best Resource: HealthMetrix Research’s 2024 CostShare Report comparisons posted on www.MedicareNewsWatch.com and available for licensed distribution.
CostShare Report comparisons represent the best available resource to help Medicare-eligibles identify Medicare Advantage plans offering the most favorable member cost-sharing and benefit value across multiple health status categories (excellent, fair, poor). Created in 1998, CostShare Report comparisons break down estimated annual out-of-pocket costs among the most popular $0 premium Medicare Advantage+Part D plans in over 100 markets.
Takeaway: Addressing and improving cost-sharing transparency is a win-win strategy. Medicare Advantage plans can close the 'cost-sharing expectation gap' by demonstrating true benefit value. Well-informed Medicare Advantage plan members are less likely surprised by unexpected cost-sharing exposure as their health declines and benefit utilization increases.
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HealthMetrix Research Inc.
Alan Mittermaier, President
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