Medicare
California and Pennsylvania Lead the Pack in Ratings
Quality Ratings of Medicare Advantage Plans

by Leila Morris

When it comes to quality Medicare Advantage plans, California, along with Pennsylvania, leads the pack. The Kaiser Family Foundation (KFF) examined quality ratings on Medicare Advantage Plans prepared by the Centers for Medicare and Medicaid Services (CMS). California and Pennsylvania account for 49% of all enrollees in plans with four or more quality stars.

But these two states account for only 27 % of all Medicare Advantage enrollees nationwide. In the majority of states, fewer than 2% of Medicare Advantage enrollees are in plans with four stars or more of out five.

On average, Medicare Advantage plans received 3.27 stars out of five. One in five Medicare Advantage enrollees is in a plan with fewer than three stars. Quality ratings are tied closely to plan type, plan experience, and the governance structure of the plan (tax status).

Not-for-profit Medicare Advantage plans have significantly higher ratings than for-profits. More experienced rated plans (with contracts beginning before 2004) have higher ratings than plans first offered on or after January 2004.

Private fee-for-service (PFFS) plans and regional PPOs have below average ratings -- significantly lower than HMOs and local PPOs. However, 55% of PFFS enrollees are in plans that did not receive quality ratings for 2010.

Average quality ratings range from an average of 4.07 stars among rated Kaiser Permanente plans to an average of 2.76 stars among rated Humana plans. However, for Coventry and Aetna, more than half of all Medicare Advantage enrollees are in plans without quality ratings for 2010.

Conversely, just 3% of Humana enrollees and no Kaiser Permanente enrollees are in unrated plans.
When just looking at HMOs, average quality ratings ranged from 4.07 among Kaiser Permanente plans to 3.02 among rated UnitedHealth Group plans. Other types of plans cannot be compared directly across the largest organizations because many non-HMO plans were not rated due to missing data. For more information, visit www.kff.org/medicare/upload/8025.pdf

Out-of-Pocket Spending is a Mixed Picture in 2010

The percentage of Medicare Advantage plans with limits on out-of-pocket spending has increased in 2010. At the same time, cost sharing for visits to primary care doctors and specialists has remained virtually unchanged.

But the news isn’t all good for patients. Average cost sharing for hospital stays and skilled nursing facility stays has increased since 2008 with greater costs being shifted to beneficiaries with the greatest medical needs, according to a report by The Kaiser Family Foundation.

Seventy-nine percent of Medicare Advantage plans limit out-of-pocket spending in 2010 compared to 66% in 2008. However, more plans now have higher out-of-pocket limits. Ten percent of plans have out-of-pocked limits of $10,000 or more compared to only 2% in 2008. The trend is more pronounced among regional PPOs. In 2010, 61% of regional Medicare Advantage PPOs had out-of-pocket limits of $5,000 or higher compared to 28% in 2008.

Also, while limits on out-of-pocket spending could provide significant protection to enrollees, only about half of Medicare Advantage plans have a limit at or below the level suggested by CMS. Beneficiaries should look carefully at premiums, benefits and cost-sharing requirements (and provider networks), when choosing between traditional Medicare and Medicare Advantage plans, or among various Medicare Advantage plans offered in their area.

However, lack of transparency about benefits and restrictions makes it difficult for beneficiaries to understand what is and is not covered by their plan. Greater transparency would help beneficiaries understand key differences across plans and critical tradeoffs, rather than just the most visible elements of the plan: monthly premiums. Trends since 2008 present a mixed picture.

In the past, at least some of the plans with out-of-pocket spending limits have excluded selected Medicare-covered benefits from the limit. For 2010, CMS encouraged firms to include all cost sharing for Medicare-covered benefits in calculating their limits. Cost-sharing for Medicare-covered services varies widely across Medicare Advantage plans, but generally differs from the benefit structure in traditional Medicare. The report includes the -following data about cost sharing:

• In 2010, 79% of Medicare Advantage plans have a limit on out-of-pocket spending for Part A and Part B services, whereas traditional Medicare does not. Regional PPOs are required to have a limit on out-of-pocket spending, although the level of that limit is not prescribed.
• Forty-seven percent of all Medicare Advantage plans have a limit on out-of-pocket spending of $3,400 or less in 2010; 32% have a limit that exceeds the $3,400 threshold, and 21% have no limit. Sixty-one percent of regional PPOs have a limit that exceeds $5,000.
• Relatively high out-of-pocket limits are less common among other plan types with limits (4% of HMOs, 10% of PFFS plans, and 21% of local PPO plans). Out-of-pocket limits are less common among HMOs (66%) than among other plan types. However, HMOs tend to use lower limits than most other plan types when they use them.
• In 2010, 14% of plans with limits appear to exclude some Medicare covered benefits from the limit. Twelve percent of the plans with out-of-pocket limits do not count cost-sharing for physician office visits toward the limit; 10% do not count cost-sharing for mental health services.
• Ninety-three percent of Medicare Advantage plans provide unlimited days of hospital care, in contrast to traditional Medicare, which has annual limits and “life-time reserve” days. Ninety-four percent require enrollees to share in the costs of inpatient care: All plans provide some vision benefit, particularly glasses and contacts.
• Eighty-six percent cover vision exams (typically one per year) and all plans cover eyeglasses. Sixty-five percent cover hearing tests. Thirty-seven percent of plans cover hearing aids. The average value of the hearing test benefit offered by plans is $299 in 2010. Fifty-one percent of HMOs, 27% of local PPOs, 15% of regional PPOs, and 7% of PFFS plans provide a hearing aid benefit. In a July 2009 study, Consumer Reports found that hearing aid prices in New York City varied from $1,800 to $6,800 per pair, including fitting and follow-up services -- far less than the amount covered by plans.
• Forty-seven percent cover more expansive podiatry than Medicare, 34% cover more expansive chiropractic services than Medicare, and 62% provide a worldwide travel benefit not provided by traditional Medicare.

Medicare Advantage benefits may be in transition if Congress reduces overpayments to plans. Other changes under discussion could expand prescription drug coverage in the so-called doughnut hole, and enhance benefits by prohibiting plans from charging more than traditional Medicare for certain services. These reforms would likely limit the discretion firms have in shaping benefits, but could also make it easier for beneficiaries to choose between Medicare Advantage and traditional Medicare, and choose among Medicare Advantage plans.

Because Medicare Advantage plans can reconfigure the design of Medicare cost-sharing, some beneficiaries, (particularly those with significant medical problems), could face higher out-of-pocket costs in some Medicare Advantage plans than in traditional Medicare.
For more information, visit www.kff.org/medicare/upload/8047.pdf

SCAN Health Reports High Enrollment in Northern California

SCAN Health Plan says that Northern California membership enrollment in its Medicare Advantage Plan has exceeded company projections with more than 3,100 people joining the not-for-profit plan’s recent launch in four local counties. Eligible individuals may continue to join SCAN until March 31. Serving more than 110,000 Medicare members in Southern California and Arizona, SCAN is now available to Medicare-eligible individuals in San Francisco, Contra Costa, Santa Clara and San Joaquin counties.

Unlike most Medicare Advantage plans, SCAN has no commercial members For more information, visit http://www.scanhealthplan.com.