ST. PAUL - As many as 300,000 Minnesota seniors have some potentially confusing health insurance shopping to do this fall.
Their Medicare Cost plans, offered by private insurers to limit out-of-pocket expenses, will no longer be available after this year and they need to sign up for something else. The change comes after an update in federal law to phase out cost plans because they are more expensive to administer.
"We are definitely hearing from Medicare beneficiaries. A lot of them are not happy about this change," said Kelli Jo Greiner, health policy analyst for the Minnesota Board on Aging.
For many of those seniors, their best bet will be moving to Medicare Advantage plans which, like cost plans, help cover added expenses and provide managed care. But advantage plans don't have the same flexibility for seniors who want to see out-of-network health care providers.
Insurers unveiled the specifics of dozens of advantage plans Oct. 1 that will be available throughout much of Minnesota. Traditional Medicare open enrollment begins Oct. 15 and runs through Dec. 7, but Minnesotans affected by the cost plan change will have more time - until February 2019 - to finalize their decisions.
Not everyone has to move. Cost plans will still be available in 2019 in 21 of Minnesota's 87 counties.
That's because counties in northeast Minnesota and other rural parts of the state don't have access to two or more Medicare Advantage plans. But that might not be the case for long, as growing demand has insurers expanding their offerings.
Jim Schowalter, president of the Minnesota Council of Health Plans, acknowledged the change will be confusing for some seniors, but he urged Medicare recipients to take their time and do their research.
A Medicare primer
Medicare is the federal health insurance program for seniors over 65 and some people with disabilities. It was created in 1965 as part of President Lyndon B. Johnson's "War on Poverty."
More than 60 million U.S. citizens are on Medicare and its rolls are expected to grow to 90 million or more during the next 30 years. For the current fiscal year, Medicare has a budget of $583 billion, or about 14 percent of all federal spending.
Medicare is the second most costly government program after Social Security. It is different from Medicaid, which provides health care and other services to the poor.
About 1 million Minnesotans are on Medicare and roughly 370,000 of those have cost plans. Health care experts estimate up to 300,000 Minnesotans will have to make coverage changes this fall.
Medicare essentially has four parts:
• Part A: Pays for hospital care.
• Part B: Covers part of doctors fees and other health care services.
• Part C: Private health plans offer coverage in addition to Parts A and B through a network of providers. This is where advantage and cost plans fit in.
• Part D: Coverage for prescription drugs.
All seniors over 65 are typically automatically enrolled in Part A and B when they start collecting Social Security. Parts C and D are voluntary and often require co-pays for coverage.
Enrollees of Medicare Cost plans who need to pick new coverage should have received a letter over the summer. People who didn't get a letter can also call their insurer to find out if they need to change plans.
Some cost plan recipients will be automatically enrolled in similar advantage plans by their insurer. That doesn't mean they are stuck with it; seniors can pick another plan or make changes to the one they are enrolled in until February.
Advantage plans are not the only options. There is also supplemental coverage under Part C, such as Medigap, that provides similar services excluding prescription drug coverage.
There's plenty of help out their for seniors, too. Insurance providers will walk customers through their options. So will insurance brokers.
Seniors can also call 1-800-MEDICARE or contact the Minnesota Senior LinkAge Line at 1-800-333-2433. Medicare.gov offers an online tool seniors can use to shop for coverage and the Board of Aging will soon have an online catalog of plans available at mnhealthcarechoices.com.
Greiner, of the Board on Aging, urges patience for seniors calling the LinkAge Line. Phones have been jammed since the new plans were announced and wait times are up, even with extended hours.
"We are maximizing our resources, but we are very, very busy," Greiner said.
Rose Leese, a quality analyst for the LinkAge Line, says even if seniors are calling about something else, they are typically reminded to check their plan.
"Some of these people have been on these plans for a number of years," Leese said. "Medicare is complicated and this is something they don't want to have to deal with. It is a frustrating time for many beneficiaries."
Things to look out for
Health care experts say Minnesotans need to be cautious when they are transitioning from their cost plans to new advantage plans and other options. There are a lot of choices out there, but seniors need to be sure the one they pick will cover everything they need.
Key things to consider are:
• Are my doctors in the network?
• Are the clinics and hospital I use in the network?
• Are my prescriptions covered?
"I think the most important thing is for people to pay attention, gather information and think about what they are looking for," said Schowalter. "With all the choices that are available, seniors will find something that hopefully will work for them."
Greiner adds it is also critical that seniors losing cost plans sign up for something. If they don't, they could open themselves up to big out-of-pocket expenses from things that are not totally covered under Medicare Parts A and B.
"The most important thing they need to know is they need to make a decision," Greiner said.