What's Best Value in Medicare Plan?

Dec 3, 2013

Even when a Medicare Advantage plan wins the federal top-quality 5-star rating, it isn’t necessarily the right choice for every beneficiary, according to a cost-sharing analysis from HealthMetrix Research.

The independent Ohio research company takes cost as well as performance into account to arrive at a "value" rating for each plan and region. Those plans win the company's "Senior Choice Gold Awards for 2014."

Medicare beneficiaries may find the awards helpful as they head into the final days to select or change Medicare Advantage plans. Open enrollment for 2014 ends Saturday, Dec. 7 for both the managed-care plans and prescription-drug coverage.

The HealthMetrix report shows that details beyond premium price and performance ratings can make a difference in comparing Medicare Advantage plans. Depending on the enrollee’s health status, a plan that drew 3 or 4 stars may be a better value once out-of-pocket costs are considered, the analysis found.

HealthMetrix does a cost-sharing comparison report of Medicare Advantage plans each year. It produces lists of plans by region that will have the lowest estimated out-of-pocket costs based on whether the enrollee is in good, fair or poor health.

“We narrow down the field of plans and as people’s health status changes, we hope this gives them peace of mind,” said Alan Mittermaier, president of HealthMetrix Research.

Only plans with 3-star ratings or above are included, unless a plan is too new to have a rating. Officials at the Centers for Medicare and Medicaid Services (CMS) use stars to indicate quality and performance on a 1-to-5 scale.

In calculating value, HealthMetrix includes cost sharing percentages and co-pays for in-patient hospital care, prescriptions, doctor visits, home health care and other medical services. The analysis also includes out-of-pocket spending limits and premium rebates. 

Offered in Florida counties where federal premium payments to health plans are relatively high and competition is fierce, the rebates reduce the Part B premium deducted from beneficiaries' Social Security checks.

Because people in poor health are likely to use more healthcare services, details such as out-of-pocket spending limits will make a difference.

CMS requires Medicare Advantage plans to limit out-of-pocket costs to $6,700 per year. But the agency also encourages plans to cap those costs at $3,400 -- and some plans do.

Medicare Advantage plans are location-specific, differing in prices and what they offer by region. For its 2014 report, HealthMetrix looked at plans in 44 states and Puerto Rico.

It zeroed in on 11 locations in Florida: Bradenton, Fort Lauderdale, Fort Myers, Jacksonville, Miami, Orlando, Pensacola, Sarasota, Tampa, St. Petersburg and West Palm Beach.

More of Florida's 3.5 million Medicare beneficiaries are attracted to managed care than their counterparts in other states.  Thirty-six percent of Floridians enrolled in Medicare Advantage plans in 2013 compared to the national average of 28 percent, according to the Henry J. Kaiser Family Foundation.

An example of how health status can make a difference when shopping for a Medicare Advantage plan is in Miami-Dade, which offers a choice of 44 of them. They include Leon Medical Centers, the state’s only 5-star plan.

Despite its top rating, Leon Medical Centers Health Plans is ranked No. 8 out of 15 plans on the HealthMetrix list for people in good or fair health who want low out-of-pocket costs.

In Miami-Dade, enrollees who remain in good or fair health throughout the year can expect zero out-of-pocket costs in any of eight Medicare Advantage plans, including Leon Medical Centers. But plans rated closer to the top of the Health Matrix list have higher premium rebates.

But the ranking shifts for people in poor health. For instance, Wellcare’s Dividend plan ranks second for Miami-Dade Medicare beneficiaries in fair health, but drops to ninth for those in poor health. What makes the difference is out-of-pocket costs, since sicker patients use more services with high co-pays.

Meanwhile, out-of-pocket costs are only part of what people should be looking at when comparing Medicare Advantage plans, said Mittermaier. If they want to keep the same healthcare providers, they should look at the plan’s network to see whether their primary-care doctors and specialists are there.

Another important note: CMS’s online Medicare Plan Finder will show much higher estimates for average out-of-pocket costs than the HealthMetrix report.

Mittermaier said that is because the Plan Finder factors in more specialized services when calculating costs, such as end-stage renal dialysis and diabetes education.

Floridians eligible for Medicare can enroll at  www.Medicare.gov/find-a-plan or by calling 1-800-MEDICARE (1-800-633-4227). Those who need advice from objective volunteers can call SHINE (Serving Health Insurance Needs of Elders) at 800-963-5337 for free and confidential information. 

--Susan Hemmingway is a freelance writer in Tampa. Health News Florida is part of WUSF Public Media. Questions can be addressed to Editor Carol Gentry at 813-974-8629 or cgentry@wusf.org. For more health news, visit HealthNewsFlorida.org