Picking a Medicare Plan Isn't As Simple As You'd Think

By Katie Keith, JD, MPH
May 14, 2021

Katie Keith provides rapid response analysis of all things Affordable Care Act for Health Affairs’ “Following the ACA” blog. She also teaches courses on the ACA and LGBT health law and policy at Georgetown University Law Center, maintains a faculty appointment at the Georgetown Center on Health Insurance Reforms and is a member of the 2021 Tradeoffs Research Council.

Much of the notoriously complex health insurance market is mediated by third parties—from benefits consultants for employers to agents and brokers for individuals, who typically receive a commission from insurers for each person they enroll. Agents and brokers have played a key role in the Affordable Care Act’s coverage expansion, but they are not required to sell coverage for all insurers and don’t necessarily offer every available plan. This has led to concerns about incentives and conflicts of interest that may lead consumers to enroll in plans that do not meet their needs.

While much attention has been paid to these issues in the individual health insurance market, new research highlights similar concerns for Medicare enrollees. About 40% of Medicare beneficiaries get their coverage from one of more than 3,500 Medicare Advantage plans, which are run by private insurers and can offer additional benefits beyond traditional Medicare. And there are nearly 1,000 Medicare Part D plans also run by private insurers that cover seniors’ prescription drug costs. With so many options to choose from, beneficiaries may turn to Medicare agents or brokers.

In April 2021, The Commonwealth Fund published a new report by researchers Riaz Ali, Aimee Cicchiello, Morgan Hanger, Lesley Hellow, Ken Williams and Gretchen Jacobson on the role of agents in shaping consumers’ Medicare choices. Ali and colleagues simulated online searches in five markets to compare the Medicare coverage options available through agent sites with the options available through Medicare.gov. 

They found that much of the online information available for Medicare beneficiaries comes from those with commercial interests. Agents and insurers made up 87% of internet-based search ads, and while information from the federal government accounted for the largest chunk of search results (about one-third), agent and insurer resources were likely to be the first resources seen online. This is important because those tools do not show all available plans: Of those reviewed, online brokerage tools displayed fewer than half (43%) of all available Medicare Advantage plans and only about two-thirds (65%) of all available Part D plans. This suggests that many Medicare beneficiaries may never see or know about the full range of available options.

Acknowledging the important role that agents play in supporting Medicare beneficiaries, the researchers call for a more “beneficiary-centric” model that would include new disclosures (such as commission structures) and agent performance ratings. But they also urge better alternatives through additional investments in Medicare.gov and public or nonprofit enrollment efforts where assisters have no financial stake in plan decisions.

These findings, which are consistent with similar concerns raised about enrollment in the individual market, suggest it may be time to rethink enrollment incentives and, at a minimum, invest in more robust consumer outreach and assistance programs.

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