Sixty thousand seniors must shop for new Medicare Advantage coverage for 2017 after Independent Health, the major provider of Medicare Advantage insurance in the region, dropped two of its most popular plans.
This gives the insurer’s rivals a chance to gain market share.
It is the most significant change coming at the start of the latest open enrollment period for Medicare and Medicare Advantage, the health insurance programs that serve more than 300,000 seniors and people with disabilities in Western New York.
“There is a lot of competition out there, and we know that. And we really appreciate the loyalty that our membership has shown us, and we intend to maintain that,” said Roberta Rifkin, Independent Health’s senior vice president for government programs and affairs.
Insurers vie to win over seniors through advertising and in-person sign-up sessions over the nearly two-month enrollment period that ends Dec. 7.
The companies are under intense pressure from the federal government to reduce costs. Three of the four main insurers in the Western New York market lost money on their Medicare Advantage line of business last year.
The Centers for Medicare and Medicaid Services developed a star-rating system that serves as a foundation for the performance-based payments the government makes to insurers.
Most local Medicare Advantage plans retained above-average star ratings for 2017. Only three of the 26 Medicare Advantage plans with drug coverage offered in Erie County saw their star ratings lowered.
Star ratings for Medicare Advantage plans in Erie County with prescription drug coverage:
BlueCross BlueShield of WNY: 4.5 stars
Fidelis Care: 4 stars
Independent Health: 4.5 stars
MVP Health Care: 4.5 stars
Today's Options: 3.5 or 4 stars
UnitedHealthcare: 3.5 stars
Univera Healthcare: 4 stars
WellCare: 2.5 stars
As seniors spend the next 6½ weeks reviewing enrollment information, officials say, they need to assess the plans’ star ratings, the monthly premiums, the total out-of-pocket costs, whether their doctors are included in the plans’ networks and whether their prescription drugs are covered.
“You have to look at the total cost. It’s not just about premium. The drug deductible is a big one,” said Tom Sass, director of consumer markets for HealthNow New York, which operates locally as BlueCross BlueShield of Western New York. “This is a population that utilizes drugs.”
Medicare Advantage is a type of Medicare insurance offered by companies that contract with the federal government. Managed Medicare plans can offer extra benefits, such as gym memberships or vision coverage, that aren’t included in traditional Medicare, and out-of-pocket costs can be lower.
About 18.8 million people are enrolled in Medicare Advantage and other health plans nationwide, compared to 38.2 million who are enrolled in traditional Medicare, according to federal data from August.
Medicare Advantage plans are more popular in Western New York than in the country as a whole. Some 33 percent of Medicare enrollment nationwide is in a Medicare Advantage plan. In the eight counties of Western New York, that figure is 46 percent, according to a Buffalo News analysis.
“It’s just a market that’s accustomed to managed care,” said Roger Van Baaren, vice president of Medicare sales for Univera Healthcare of Amherst and its Rochester-based parent, Excellus BlueCross BlueShield.
Medicare Advantage enrollment in Western New York:
Company 2016 Change since 2015
IHA 94,229 -1 percent
HealthNow 42,787 -8 percent
Univera 14,222 -11 percent
Fidelis Care 3,194 76 percent
Sources: Centers for Medicare and Medicaid Services and companies
Unlike many people who receive employer-provided coverage, and have little choice over their insurer, the majority of those Medicare members are up for grabs during the enrollment period that began Oct. 15.
The insurers use billboards, newspaper and TV ads and mailings to reach seniors.
Fidelis Care New York has a rapidly expanding operations center in Getzville and began offering Medicare Advantage in the region two years ago.
“It is extremely competitive every year,” said Scott Averill, vice president of marketing for Fidelis Care New York. “There’s pricing changes. There’s cost-sharing changes. Everyone’s jockeying for position.”
Changes to plans
The companies that lost money in the region on their Medicare Advantage plans blame high taxes and fees, insufficient reimbursements from the government and rising medical and drug costs.
The losses drove the insurers to tinker with the benefits offered in their plans, raise the monthly premiums slightly or make more radical changes.
Independent Health made the biggest shift, by dropping two of its most popular plans, the Encompass 65 Essential HMO/POS with $0 monthly premium, which enrolls 31,200, and the Network Advantage HMO, which enrolls 28,200 in Erie and Niagara counties, according to the government. The insurer also is dropping a third, smaller plan that enrolls about 3,000 in the region’s outlying counties.
“We had some financial issues that we needed to address,” Rifkin said.
Other insurers have made similar changes to drop $0 monthly premium plans, with prescription drug coverage, and only five such plans are offered in Erie County today.
Independent Health has 54 percent of the Medicare Advantage market here. The insurer has three plans offering prescription drug coverage locally, including a new plan for 2017, Encompass 65 Core, with a $65 monthly premium. Rifkin said the insurer’s members evaluate the whole package, including whether their doctors and hospitals are in network.
But other insurers said the change is an opportunity to gain membership.
“Absolutely, I think there were 31,000 people in that zero-dollar plan,” Univera’s Van Baaren said. “And generally people who gravitate towards zero-dollar plans prefer to stay in zero-dollar plans if they can.”
Univera still offers a $0 monthly premium plan with prescription drug coverage.
The company wants to stem a recent Medicare Advantage enrollment decline. Membership fell 11 percent between 2015 and 2016, after falling 26 percent between 2014 and 2015.
Van Baaren said the company for 2017 offers a more attractive set of benefits, in some cases, and raising some premiums slightly for plans.
HealthNow has the second-largest Medicare Advantage enrollment in the region, although it fell 8 percent from last year.
The company several years ago eliminated its $0 monthly premium plan with drug coverage, saying it wasn’t financially sustainable. HealthNow was the only one of the four major players in the local market to make money on its Medicare Advantage plans last year.
The company two years began offering a tailored network product, which excludes non-emergency care at most Catholic Health System facilities. HealthNow this year began offering a tailored network plan that treats non-emergency services at Kaleida Health hospitals and at Erie County Medical Center as out-of-network.
“Members have told us that they like the tailored network offerings. And so we are looking to expand those offerings, but the majority of our plans still include both health care systems,” said Dave Busch, HealthNow’s senior vice president and chief sales officer.
Fidelis Care is the only one of the four main insurers in the region to see growth in its Medicare Advantage enrollment from last year to this year. The company sells Medicare Advantage plans in six Western New York counties today.
The company promotes its value-added benefits. One offers car-service trips, if seniors can’t get to an appointment, while another offers an over-the-counter pharmacy card, pre-loaded to pay for items such as aspirin and bandages.
“We try to maintain competitive benefits in every region,” said Pamela Hassen, Fidelis Care’s chief marketing officer.
The insurers are under pressure to keep up the quality of their Medicare Advantage plans. The federal government uses its star-rating program as a tool to help consumers compare plans, and to reward insurers with incentive payments for meeting standards.
Plans are rated on a scale from one to five stars on clinical quality, member experience and other measures.
The 26 Medicare Advantage plans with prescription drug coverage offered in Erie County for 2017 received an average rating of 3.98, down slightly from the 4.07 average for 2016. That’s primarily because three plans offered by Today’s Options and WellCare fell in the ratings.
Consumers have until Dec. 7 to explore their options and select a plan. Officials encourage them to do their homework and to compare plans through Medicare.gov.