Insurance Exchanges Can Aid Some Medicare Beneficiaries
When D. Sloan Hill retired 20 years ago at age 65 from his job in public affairs for a major manufacturing company, his former employer provided a health insurance plan that filled in the gaps in his Medicare coverage. It was a good arrangement--until the end of last year when the company discontinued his private coverage, and Hill had to figure out what to do.
He got a helping hand from an unexpected quarter: A company called Extend Health that operates a Medicare exchange — a virtual marketplace for Medicare Advantage, Medigap and Medicare prescription drug plans from dozens of companies around the country. Working by telephone with an Extend Health insurance counselor, Hill eventually signed up for a Medicare Advantage plan near his home in Bessemer, Ala.
The experience was a positive one, says Hill. "Otherwise, I would have had to do a lot of research on my own, which would have been time consuming and very confusing," he says.
The long, slow demise of company-sponsored retiree health insurance continues. In 2011, just 16 percent of employers with 500 or more employees offered medical insurance to their Medicare-eligible retirees, down from 40 percent in 1993.
Increasingly, companies are contracting with Medicare exchanges like Extend Health to try to ease the transition for their former employees.
"Many employers are very paternalistic about their retirees," says Bruce Richards, chief actuary and quality leader of health care business for the consulting firm Mercer.
Individual retirees may be able to use the exchanges as well. Trained insurance counselors work with people to figure out what's the best option for them depending on their priorities. (The counselors generally rely on salary rather than commission, but other sales incentives may factor into their pay.)
In Hill's case, he was primarily interested in ensuring he could go to his regular doctors. Working with a counselor, they learned that his doctors were part of the Medicare Advantage plan network.
With 10,000 people turning 65 every day, the market for Medicare exchanges is likely to keep growing, says Richards.