With Medicare open enrollment getting underway this week, insurers are putting on the hard press to attract new baby boomers aging into the program, offering hundreds of plans and service options tailored to their individual medical needs.
Guy Penney, a Sacramento, California, hairstylist who turns 65 next month, says he's been deluged with mailings from insurers for months now.
"People come out of the woodwork to contact you," said Penney. He said he's never thought much about health insurance because he's been covered under his wife's benefits for years.
Now, he's finding the wide number of plan options overwhelming. He's leaning toward enrolling in traditional Medicare coverage with a supplemental Medigap plan, rather than an all-in-one Medicare Advantage coverage. But, he's not sure.
"It's a little scary, because you're wondering whether you're going to get the best deal, you know? Because there are so many different ones," he said.
Medicare annual enrollment started Tuesday and runs through Dec. 7.
With 10,000 baby boomers aging into the program every day, Medicare is now the fastest-growing segment of the health insurance market. Enrollment in private Medicare Advantage plans has grown by about 8% a year on average, and for 2020, the Trump administration is projecting the market will see 10% growth.
The major health insurers are all expanding coverage for next year to try to capture more market share. CVS Health's Aetna unit is moving into more than 260 new counties. Rival UnitedHealthcare is expanding into 100 new markets, Cigna is adding 80 new counties, while Humana is adding more than two dozen.
For Medicare beneficiaries, the expansion amounts to a 32% increase in the number of Medicare Advantage plan choices compared to last year — in some markets that means 20 options or more. According to the Centers for Medicare and Medicaid Services, Medicare Advantage premium costs will be down 14% on average from last year.
Online health insurance brokerage eHealth is gearing up to help seniors sort through all the new options. Their agents typically spend more than 40 minutes to an hour on the phone with enrollees.
"It's great for seniors — there are a lot more plans [and] a lot more alternatives," said eHealth CEO Scott Flanders. "But there's also more confusion and a little bit more stress for the senior, trying to get them into the right plan."
The recent surge in new choices can be partly attributed to a change by the Trump administration that gives insurers greater flexibility to design all-in-one private Medicare Advantage plans that include additional benefits that go beyond add-ons like dental and vision plans. New service options can target beneficiaries with more complex needs like help with home care, chronic disease management and transportation to doctor visits.
"We have 10 new products this year that are designed for people with specific chronic conditions," said Joy Scheil, senior director for Medicare Advantage plans at UnitedHealthcare, but she admits the rollout of some of enhanced services is a work in progress.
"We're still building out the infrastructure for some of these … figuring out what's the right criteria to ensure we're getting these to the right members," she said.
Even with older, sicker enrollees, all-in-one Medicare Advantage plans can still be lucrative for insurers if they can keep them at home and avoid costly hospital stays. That is the proposition of new Medicare entrants in the market like Devoted Health, which is backed by venture capital firm Andreessen Horowitz, and rivals Oscar Health and Clover Health, which are backed by Alphabet's Google Ventures.
"There seems to be a lot of potential value for the venture capital companies because when you think about it, they're investing in these insurance plans for seniors rather than investing in other types of products like biotech or any health-care technology," said Gretchen Jacobson, associate director of Medicare policy at the Kaiser Family Foundation.
The growth in private Medicare plans comes as Democratic presidential hopeful Sens. Bernie Sanders and Elizabeth Warren have proposed banning all private health insurers and enrolling all Americans in traditional Medicare plans administered by the government.
Even among Democrats, there is skepticism about how their "Medicare for All" proposals would transition away from private insurers. An NBC News/Wall Street Journal poll last month found that 56% of voters oppose getting rid of private insurance.
"Private plans play a very large role in the current Medicare system," said Jacobson, adding "it could be really tough to unravel that, particularly in some markets where you see a vast majority of people enrolled in private plans."
Baby boomers like Penney value having plan options, even though it's challenging to make the right choice.
"What helps is the fact that I know next year I could change it, if I didn't like it," he said.