Members of MedPAC, the Medicare Payment Advisory Commission, reiterated their broad support for simplifying the Medicare Advantage (MA) landscape for consumers during a meeting Sept. 7 but were quick to say a balance needs to be struck to avoid overregulation.
With most beneficiaries now eligible to enroll in MA plans, the commission believes there are arguably too many options out there that are not substantially different, clouding the best options for the average consumer. Many beneficiaries now have 41 plans available to them, and the number of plans available has more than doubled in the last five years, MedPAC staff said.
“We believe that the growth in the number of insurers is likely due to the generous plan payment rates and overall profitability of the MA program,” said Eric Rollins, principal policy analyst for MedPAC. “We found this growth has been primarily driven by the major publicly traded insurers which already offered MA plans in 2018 but has since expanded into new geographic markets.”
He added that a Trump administration change in 2019, which eliminated a requirement that MA plans must have meaningful differences from other plans offered by the same insurer in the same market, likely exacerbated the problem. Since then, the average number of similar plans in the same county has risen from 3.3 to 5.1.
The commission, which advises Congress on Medicare, discussed standardizing MA last year, describing several types of cost-sharing packages that could mitigate the problems currently facing customers in the marketplace. But staff noted in their most recent meeting that for the 36% of plans either employer-sponsored or characterized as special needs plans, standardization may not be optimal and could be opposed by policymakers.
MedPAC member Brian Miller, M.D., raised the possibility of letting consumers use advanced filters for evaluating plans, like how someone would sort for houses on Zillow or get a room through hotel booking websites. Several committee members countered that this could cause several unintended consequences—such as presenting an abundance of details and choices particularly for something as complicated as healthcare plans—and may be too overwhelming in this format for the average consumer.
“You can find examples of beneficiaries who will have a lot of trouble making heads or tails from a website alone, even if it has great quoting and filtering tools when it comes to showing plans,” John Barkett, managing director for global consulting firm Berkeley Research Group, told Fierce Healthcare. Barkett worked for a year on the health subcommittee for the House Committee on Ways and Means, helping write the Affordable Care Act as a junior staffer, before working two and a half years with the Obama administration and later joining the Biden administration as a policy analyst.
“But I think beneficiaries also can be very savvy and understanding of their benefits,” he added. “I don’t think having better tools is ever a bad thing, but that has to come with making it easier for them to get advice from some sort of expert.”
He said that for the average Medicare beneficiary, the system is currently “somewhat oppressive” in trying to navigate all the different health plans and make a good decision. Still, he understands that policymakers could “go too far” in pushing for regulation that stifles plan flexibility and hurts competition.
“I am really struggling with this because I, in principle, really agree with the idea of standardizing the benefits because I think having 41 plan choices is just not reasonable … but I’m not exactly sure how to do that efficiently,” said MedPAC member Stacie Dusetzina. She said limiting standardization to certain supplemental benefits like dental, hearing and vision could help preserve plans' ability to innovate and meet individual needs.
“I think the balance that you try to strike as a policymaker is not to limit choice too much, but to make sure the choice is meaningful for beneficiaries,” explained Barkett. “And the way to measure whether or not choice is meaningful is to have enough differentiation in the products to make sure that you're satisfying the needs of customers who have different preferences for their products.”