Medicare Beneficiaries Need More Help Navigating the Program, Experts Say

More needs to be done to help Medicare beneficiaries — especially low-income beneficiaries — navigate their participation in the program, several experts said Friday.

“Low-income Medicare beneficiaries navigate complex and fragmented sources of insurance coverage … not just within Medicare, between the choice of a Medicare Advantage plan or traditional Medicare, but also from the patchwork of programs that supplement Medicare and help to lower out-of-pocket costs for low-income individuals,” which include Medicaid, said Eric Roberts, PhD, of the University of Pittsburgh School of Public Health.

“The additional eligibility rules for these programs are restricted, and they exclude many people with low to moderate incomes from assistance,” Roberts explained during a webinar presented by the Alliance for Health Policy and sponsored by the Commonwealth Fund and Arnold Ventures.

One big problem for low-income beneficiaries is that there are no limits in the program for out-of-pocket costs, said Tricia Neuman, executive director of the Program on Medicare Policy at the Kaiser Family Foundation.

For example, “Medicare doesn’t have an out-of-pocket cap on Part D prescription drugs,” she said. “That’s something that has been talked about a lot in the past couple of years, and it’s something that was included in the Balanced Budget Act that has passed the House and is now stalled in the Senate.”

Neuman pointed out that this raises “serious concerns,” particularly for those prescribed very high-cost specialty drugs. Plus, she added that Medicare generally doesn’t cover costly long-term services and supports.

“Dental services are not generally covered, and hearing and routine eye exams are not covered — all of which have been subject to some policy discussion, but none of which have made it across the finish line,” she said.

As a result of all the coverage gaps, the average Medicare beneficiary pays $6,150 annually out-of-pocket on premiums and services. For those 85 and older, that amount nearly doubles to $12,063 annually.

More and more Medicare beneficiaries are enrolling in Medicare Advantage, for several reasons, noted Neuman. For instance, these plans often offer extra benefits that traditional Medicare doesn’t cover, such as eye exams or fitness programs. Also, “you get all [the benefits] in one, and you don’t need a supplemental plan [or] a separate Part D [drug] plan,” she said, and added that these plans also tend to have low payments.

However, there are tradeoffs to Medicare Advantage that beneficiaries often are not aware of, such as a restricted provider network. There may also be prior authorization restrictions which don’t apply to traditional Medicare. “There is also cost-sharing for services that may or may not matter to people when they’re healthy, but could be an issue for people when they’re sick,” she said.

Finally, if people leave Medicare Advantage and go back to traditional Medicare, they frequently can’t buy a Medigap policy — also known as Medicare Supplement Insurance — because they have a preexisting condition. “The ‘guaranteed issue’ protections that people know a lot about thanks to the Affordable Care Act do not apply to Medigap, so people with preexisting conditions in almost all states can be denied a plan,” Neuman explained.

And despite lower premiums for some plans, a higher percentage of Medicare Advantage enrollees — 19% — reported cost-related problems compared with only 15% of enrollees in traditional Medicare. The lower percentage for the latter group was likely due to their supplemental coverage; in fact, 30% of traditional Medicare enrollees who didn’t have a supplemental plan reported cost-related problems. “These are trends that we are watching and they are important because as Medicare spending continues to rise, out-of-pocket costs will continue to be a serious concern,” she said.

On a more positive note, there is evidence that Medicare can shrink racial and ethnic gaps in access to care, said Loren Saulsberry, PhD, of the University of Chicago Department of Public Health Sciences. She cited a 2021 JAMA Internal Medicine study led by Jacob Wallace, PhD, of the Yale School of Public Health, which found that eligibility for Medicare at age 65 years was associated with reductions in racial and ethnic disparities in insurance coverage, access to care, and self-reported health.

However, Saulsberry explained that while Medicare may improve these outcomes in some ways, “it’s not quite bringing all populations to parity.”

Procedural issues also cause problems for Medicare beneficiaries, according to Lindsey Copeland, JD, director of federal policy at the Medicare Rights Center. Although people who start taking Social Security at age 65 are notified of their eligibility for Medicare, those who take Social Security later — which includes an increasing number of beneficiaries — are not notified.

“As a result, many people bear the full burden of navigating Medicare’s complex enrollment process alone, often to disastrous effect,” due to Medicare’s late enrollment penalty, she said.

For example, if someone waited until 7 years after they first became eligible for Medicare to sign up, “they must pay 70% more every month for as long as they have Medicare, amounting to a lifetime penalty,” said Copeland. “An example for 2022 would be since the base Part B premium this year is $170.10, their monthly premium with a penalty would be $289.17.”

Currently, an estimated 776,2000 people are paying a late enrollment penalty, she said.

“Financial challenges, along with rising healthcare costs including prescription drug costs, antiquated program rules, and burdensome administrative requirements can make it difficult for many beneficiaries to obtain the care they need,” Copeland concluded. “It’s really critical that policymakers step in to help reduce these barriers to care.”