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Policy makers often promote the concept of “choice” as a key pillar of health care and insurance, including within the Medicare program. The importance and availability of “choice” becomes less clear, however, the closer one examines what choice actually means with respect to health insurance coverage – including in the Medicare program.

Wendell Potter’s New York Times Op-Ed on “Choice”

In a recent New York Times op-ed entitled “How the Health Insurance Industry (and I) Invented the ‘Choice’ Talking Point” (Jan. 14, 2020), former insurance executive Wendell Potter discusses the concept of choice as it relates to private insurance. Mr. Potter (who will deliver the Rockefeller lecture at the Center’s National Voices of Medicare Summit on April 30, 2020) warns:

When the candidates discuss health care, you’re bound to hear some of them talk about consumer “choice.” If the nation adopts systemic health reform, this idea goes, it would restrict the ability of Americans to choose their plans or doctors, or have a say in their care.

It’s a good little talking point, in that it makes the idea of changing the current system sound scary and limiting. The problem? It’s a P.R. concoction.

In order to prevent reforms that would threaten insurance industry profit, Potter states that when he was working in the insurance industry “[w]e were told by our opinion research firms and messaging consultants that when we promoted the purported benefits of the status quo that we should talk about the concept of ‘choice.’”

According to Potter, insurance executives understood, however, that:

one of the huge vulnerabilities of the system is its lack of choice. In the current system, Americans cannot, in fact, pick their own doctors, specialists or hospitals — at least, not without incurring huge “out of network” bills.” […]

Well aware that we were losing the “choice” argument, my industry colleagues spent millions on lobbying, advertising and spin doctors — all intended to muddy the issue so Americans might believe that reform would somehow provide “less choice.”

Potter sums up his analysis of consumer choice – or the lack thereof – within the context of the current “Medicare for All” debate in an election year:

The truth, of course, is that Americans now have little “choice” when it comes to managing their health care. Most can’t choose their own plan or how long they retain it, or even use it to select the doctor or hospital they prefer. But some reforms being discussed this election, such as “Medicare for all,” would provide these basic freedoms to users. In other words, the proposed reforms offer more choice than the status quo, not less.

My advice to voters is that if politicians tell you they oppose reforming the health care system because they want to preserve your “choice” as a consumer, they don’t know what they’re talking about or they’re willfully ignoring the truth. Either way, the insurance industry is delighted.

I would know.

While Mr. Potter makes these arguments in the context of an election year in which health care is set to play a large role, the concepts apply equally to a dynamic within the Medicare program that is not getting enough public debate – the diminishing freedom of traditional Medicare being replaced by the choice-limiting Medicare Advantage program.

Coverage Options in Medicare

On its face, the Medicare program offers its beneficiaries a wide array of choices about how they would like to access their care. Unlike most other types of insurance coverage, Medicare beneficiaries have the choice of being in traditional (sometimes called “original”) Medicare (in which roughly two-thirds of all beneficiaries are enrolled) or in a private Medicare Advantage (MA) plan. People with traditional Medicare coverage have access to all Medicare-participating health care providers. They often seek supplemental coverage, such as a Medigap plan, to cover cost-sharing, and if they want Part D prescription drug coverage, also choose a separate Part D plan. Those who wish to enroll in a private MA plan, which are viewed as offering “one-stop shopping” because they often provide Part D prescription drug coverage and some other supplemental coverage not offered in traditional Medicare, have an abundance of plans from which to choose. According to the Kaiser Family Foundation, in 2020, the average Medicare beneficiary has access to 28 Medicare Advantage plans in their geographic area.

As noted recently by journalist Mark Miller in a New York Times article, discussed in a previous Alert, “one of the least understood implications of selecting [Medicare] Advantage when you enroll in Medicare: The decision is effectively irrevocable.” Every year people are free to enroll in an MA plan, but because of the limitations on rights to purchase a Medigap policy, most people are not able to pick up a Medigap policy after the 6 month period following enrollment in Part B.

For those who choose to enroll in an MA plan, while there are many plan options to choose from, choice is getting more complex, not less. A number of recent policy changes have made this more pronounced. Minimum requirements regarding standardization of benefits within a given plan in a given service area have been loosened. While MA plans can offer a wider array of supplemental benefits than they could before, they can now target such benefits to some – but not all – enrollees in the plan based on a person’s health condition, which creates more variables to navigate. Rules that dictate how plans can be marketed and sold have been watered down to the benefit of plans but to the detriment of consumers. In addition, the government has put its thumb on the scale in favor of MA plans, actively promoting MA enrollment over traditional Medicare.

Not all people who are in an MA plan enrolled by choice. The Kaiser Family Foundation notes that in 2019, 1 in 5 MA enrollees (20%) were in a group plan, which are largely sponsored by unions and employers that contract with an insurer to provide benefits to their Medicare-eligible retirees. For many retirees with such coverage, an MA plan is their only option if they wish to retain some type of retiree coverage.

 “Choice” in Medicare Advantage – Access to Providers and Care

Choice is actively promoted when someone is searching for and selecting a plan, but, as Mr. Potter highlights in his op-ed, the concept of choice changes once someone is actually enrolled in a plan. At that point, much decision-making is taken away regarding who you see and what services you can get – instead of being patient-directed, it is the plan that makes the decisions.

One of the most important health care considerations for an individual is the ability to choose one’s doctor(s) and other health care providers. One of the hallmarks of traditional Medicare is free choice of provider – an individual can see any provider across the country that accepts Medicare. By design, however, MA plans generally contract with a limited network of providers to care for their enrollees (such as HMOs), and some charge more to see providers that don’t contract with the plan (such as PPOs). Access to specialists can be limited, and providers can be terminated from the network mid-year, with little to know recourse for their patients.

While MA plans tout their ability to “coordinate” or “manage” care, in practice, this often results in care just being denied. According to a Health and Humans Services (HHS) Office of Inspector General (OIG) report in 2018, government audits “highlight widespread and persistent [MA plan] performance problems related to denials of care and payment.” As discussed in a previous CMA Alert addressing the report’s findings, OIG stated that MA plans: “may have an incentive to deny preauthorization of services for beneficiaries, and payments to providers, in order to increase profits. High overturn rates when beneficiaries and providers appeal denials, and CMS audit findings about inappropriate denials, raise concerns that some beneficiaries and providers may not be getting services and payment that [MA plans] are required to provide.”

Conclusion

If policymakers truly want to provide Medicare beneficiaries with choice in accessing Medicare coverage, they will act to preserve and strengthen the traditional Medicare program, at the very least by leveling the playing field between traditional Medicare and private MA plans. The approach taken in H.R. 3, a historic bill that passed the House of Representatives in December 2019, would be important step in this direction. Among other things, H.R. 3 would take much of the savings resulting from bringing the cost of prescription drugs down and reinvest them in the Medicare program by expanding coverage to include dental, hearing and vision (to the benefit of all beneficiaries), improving low-income protections, and making an important expansion of federal rights to purchase a Medigap policy. Without such reforms, the concept of “choice” in Medicare will continue to become more of a myth.

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March 5, 2020 – D. Lipschutz

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