Just as an increasing number of Medicare beneficiaries are enrolling in Medicare Advantage plans, more and more employers that offer retiree health benefits are providing them through these private insurance policies.
According to a new analysis by the nonpartisan Kaiser Family Foundation, just 13 percent of employers with more than 200 workers offer health benefits to retirees 65 and older and 21 percent offer retiree coverage to retirees regardless of age. Among the firms that offer these benefits, an increasing number provide them through a Medicare Advantage plan, the private insurance alternative to original Medicare.
Half of large employers that offer health benefits to Medicare-age retirees provide them to these 65-plus retirees through a Medicare Advantage plan compared with 26 percent that used such plans in 2017. And 44 percent of those large employers that use the private insurance alternative do not give their retirees a choice of whether to enroll in a Medicare Advantage plan or use original Medicare if they want to access their retiree benefits.
Cost driving move to Medicare Advantage
Among the nation’s largest employers, 42 percent told Kaiser that the main reason they moved to Medicare Advantage plans for their retirees was to lower costs.
Kaiser researchers say moving to Medicare Advantage plans “may help retirees if it enables employers to maintain or even broaden retiree health benefits.” But, the report says, “this approach has the potential to restrict retirees’ access to doctors and hospitals, depending on the plan’s provider network.”
Medicare Advantage plans rely on networks of doctors and hospitals to provide care to beneficiaries, who usually have higher out-of-pocket costs if they see providers who are not in a plan’s network. Under original Medicare, enrollees can go to any medical provider that participates in the Medicare program.
Medicare Advantage plans may also require beneficiaries to get prior authorization for some medical care, which the Kaiser report says, “may limit access to Medicare-covered services.”
According to data released by the Centers for Medicare & Medicaid Services on Nov. 29, of the 65 million people enrolled in Medicare, nearly half — 30 million — have signed up for a Medicare Advantage plan.