More Medicare Plan Choice: Helpful or Confusing?


Is more better when it comes to health-plan choice?

Medicare is leaning toward that position in a proposed rule published this week for its Medicare Advantage managed care program. The Centers for Medicare & Medicaid Services is considering doing away with what it calls “artificial limits” on MA plans

Currently, MA plans offered by the same sponsor in the same county have to be substantially different from each other in terms of premiums, cost sharing, and benefits.

The “meaningful difference evaluation” is to ensure a balance between giving beneficiaries a wide range of plan choices and avoiding confusion in plan selections.

CMS expects that eliminating meaningful difference will improve plan options available to beneficiaries.

The agency said the current meaningful difference methodology may force MA organizations to design benefit packages to meet CMS standards rather than beneficiary needs. MA organizations may be decreasing benefits or increasing cost sharing to satisfy the meaningful difference evaluation, it said. 

Also, since meaningful difference was put in place, the CMS said it has come up with new ways to help beneficiaries decide in which plans to enroll. For example, plan details have been expanded in the Medicare.gov plan finder tool

But John Gorman, executive chairman of a Washington-based consulting company, told me that ending meaningful difference could “reintroduce hundreds of similar plan designs back into the market and confuse beneficiaries.”

And CMS itself acknowledges that studies have shown that elderly consumers may be challenged by a large number of plan choices that could lead to their not changing plans when that’s a good idea.

Despite that, the agency said it believes that ending the meaningful difference standard won’t necessarily increase the number of plans significantly or create confusion in beneficiary decision-making.

You have a few more weeks to let the agency know what you think.

Read my full story here.

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