Stories From Open Enrollment Show The Problems With Our Healthcare System

December 12, 2024

My work with everyday consumers shows how irrational and broken the healthcare system really is.

I am known as the healthcare guy to family and friends. For the past many years, I have had a bit of a part-time job in Q4, unpaid as it is. Given my background, I receive calls from a rather extended network of people seeking my aid and advice on the enrollment seasons – traditional Medicare with Medicare Supplement, Medicare Advantage (MA), Medicare Part D, the Federal Employees Health Benefit Program (FEHBP), the Exchanges, and employer group coverage. In retirement I plan to expand this free service for a variety of reasons, all of which I have learned from the past decade working with people.

The stress of it all – When that open enrollment letter or Annual Notice of Change (ANOC) drops, I start to get the calls. You can hear the stress in people’s voices immediately.
It is a big financial decision – Depending on health and life events, the choice to go lean or go with a richer plan can have huge implications.
The sheer complexity and confusion – This year I served about a dozen folks. For some people it takes just a 15-to-20-minute phone call to recommend strategies, offer advice, or very importantly give them confidence that they have made the right decision. In others, I invest hours with them over multiple weeks to help them make the right decision given unfortunate life experiences and aging.
Plan terminations – This year we saw a large number of plan terminations in MA, Part D, and FEHBP. This added to the stress of folks. These terminations are likely to continue into 2026 and beyond.

Here are some of this year’s cases in hopes that some of them resonate (sometimes unfortunately) with your friends and family and you can offer some advice as well. In the end, we are all a big community supporting each other in a very complex world of healthcare.

Cases:

(Note that I have done my best to scrub personal details except in one case at the end. Within the use cases and at the conclusion, I offer some observations and advice (sometimes I repeat observations if they are relevant to a number of cases.)

Elderly couple (mid to late ‘80s and early ‘90s) – some healthcare complexity. Clinical backgrounds.

In this case, the female has Alzheimer’s and other healthcare conditions. The male is a federal retiree with FEHBP coverage with some mild dementia but increasing complexity from disease states.

The female is on an MA HMO plan. The family and I decided to maintain the female on her existing MA HMO plan. Some consideration was made to move her to a PPO plan, but all of her doctors appear in network. She could very well hit her maximum out of pocket (MOOP) costs due to her conditions in 2025. She lives in NY where guaranteed issue would allow her to jump back to traditional fee-for-service (FFS) Medicare and gain Medicare Supplement. But given the complexity of her husband’s enrollment season, we decided to leave her where she is for now. We ran out of time to do the full financial analysis on FFS-Supplement costs vs. MA that has MOOP protection.

The male had to change FEHBP plans because his local HMO plan was being terminated. The FEHBP HMO and his wife’s MA HMO are in fact the same company. It has a very good reputation. It was previously founded by a doctor and tends to have very consumer-friendly policies.

We moved the male to a BCBS plan that looks and feels like a PPO. It has a wide preferred network and out-of-network access. We decided to pay a little more each month ($130 more) given his current payments and due to some uncertainty as to doctors that will be needed in the future. I would note that the FEHBP employee and retiree plans are not as generous as one might think. (Note: many federal retirees are not required to enroll in Medicare and can stay on FEHBP as a retiree.) His projected 2025 overall costs, with cost-sharing, could exceed what it would cost to enroll in MA or traditional Medicare/Supplement (even paying the monthly Part B premium). Again, time ran out, but we may look at enrolling him in Part B and transitioning to Medicare if we can get a special enrollment period in Medicare early in the year.

The good news is the couple is comfortably in the middle class and can afford what could be some growing costs in 2025.

Some advice and observations:

While most people cannot really switch between MA and FFS/Supplement, know your state’s rule on guaranteed issue. This could be something to consider depending on projected expenses and how expansive your state’s guaranteed issue laws are.
If you are a federal retiree who has a choice of enrolling in Medicare, look at both options.
With MOOPs in MA and FEHBP capped, some consideration should be made to both HMO and PPO options in case out-of-network coverage is needed.

Mid ‘70s female in good health but with melanoma. Clinical background.

This person was unexpectedly diagnosed with melanoma. Costs of infusion therapy and more are expected to be very high in 2025. What’s more, the enrollee’s MA plan was terminated in 2025 and she had to find an alternative.

Given the catastrophic expenses and multiple new doctors that will be needed, we compared a successor MA PPO plan (we were unsure if all providers would be in network) to an FFS/Supplement/Part D package. Because this person lives in NY, she can jump back to FFS and get a Supplement plan. We looked at both Plan F and G. We also looked at Part D plans because an expensive retail medication could be needed. For our scenario build, we actually chose a low to medium premium plan rather than a very high premium plan. Because dental and vision coverage would be lost if she leaves MA, we also built in some free-standing dental and vision coverage and premiums.

In the end, the enrollee decided to stay in MA and migrate to the PPO plan. While costs might be lower in FFS/Supplement, the difference might have been about $125 a month. The enrollee felt the MOOP in MA, having coverage under one roof, and the other supplemental benefit perks made it a good bargain. And, with an expected good treatment outcome, her costs would go down in 2026.

Some advice and observations:

While most people cannot really switch between MA and FFS/Supplement, know your state’s rule on guaranteed issue. This could be something to consider depending on projected expenses and how expansive your state’s guaranteed issue laws are.
With MOOPs in MA and FEHBP capped, some consideration should be made to both HMO and PPO options in case out-of-network coverage is needed.
If choosing Medicare Supplement as part of FFS coverage, consider your estimated cost-sharing against the added monthly premiums for richer plans. While Medicare Supplement Plan F is now cut off for newer Medicare enrollees, it is still an option for some. Often, Plan F’s premium is far more than Plan G. The only difference in coverage is the Part B deductible is covered in F but not in G.
With the migration to a $2,000 cap on Part D each year, it may be unwise to choose a very high premium plan. If you are going to max out due to drug costs because you have expensive drugs, a lower premium plan could be better. You also can enroll in the Part D smoothing program, where you can pay cost-sharing over 12 months.

Early ‘70s female in good health but with osteoporosis.

Each year I help this woman decide what standalone Part D (PDP) plan is best. She has Medicare FFS and a strong Plan F for Medicare Supplement. Her Part D needs right now are relatively small but we do elect a medium premium plan in case her needs go up. This is a question of comfort for the enrollee.

I call this case out because in the past she was paying several hundred (or thousand) dollars a year for coverage of Prolia in Part D. But recently she has begun receiving the drug twice a year at a free-standing ambulatory center. Her claims have been paid under Part B and her strong supplement policy. Her costs here have gone to $0.

Some advice and observations:

Always consider your Part D premium against your anticipated needs.
More and more Part D plans will require you to pay most or all of the standard deductible. Look at the deductible against increased premiums before you decide to pay for a higher premium plan with a lower or no deductible.
With the migration to a $2,000 cap on Part D each year, it may be unwise to choose a very high premium plan. If you are going to max out due to drug costs because you have expensive drugs, a lower premium plan could be better. You also can enroll in the Part D smoothing program, where you can pay cost-sharing over 12 months.
There are a number of drugs like Prolia that could be covered under Parts A, B, or D depending on circumstances. In most cases, the part that the drug is covered under is dictated by Medicare. But in others, there is more ambiguity and coverage in a given part could be determined by how it is administered. And what you pay can be determined by your other coverage, such as Medicare Supplement. Make sure you examine this. Sometimes doctors make bad decisions without regard to your cost-sharing.

Late 80s female – moderate to poor health with about ten medications

I have helped this elderly person for years now. She has traditional Medicare and Supplement because of where she lives part-time. Thus, she needs a PDP plan. In the past, I have gone between low premium/lower benefit and high premium/higher benefit plans depending on the plan design in a given year. But I always chose the lowest overall projected outlays. With the diminution in benefits in 2025, this has become more difficult. For the first time in a long time, I recommended moving her to a different Part D sponsor and to change pharmacies to a preferred pharmacy. This will save her about $500 a year compared with maintaining coverage in her current PDP. I also told her she could get two of her medications at her current pharmacy to save even more, but that is perhaps a major inconvenience for the money saved.

Some advice and observations:

The world of Part D is changing dramatically. With costs going up in the drug world and problems with mandatory benefits from the government, benefits are less robust, especially in PDPs. Deductibles are increasingly present. Costs in various tiers are changing. Generics may or may not have low cost-sharing. Non-preferred and specialty tiers have very high cost-sharing. For those with catastrophic costs each year, the $2,000 cap helps. But for others, costs will increase and choosing wisely is key.
Part D plans are increasingly using preferred networks, which offer lower cost-sharing. Look at this closely. You can reduce your costs by hundreds of dollars a year.
Given the use of preferred pharmacies, it is also possible to save within a PDP plan by determining what costs are at different pharmacies in your Part D plan network. This could be inconvenient and is not for the faint-of-heart, but it saves.
To look at preferred pharmacies and more savings using multiple pharmacies in your Part D plan network, do the following: Go to Medicare.gov, enter your drugs, choose your plan, and choose various pharmacies. You should see a nice comparison across pharmacies.

Couple just turning 65 and becoming Medicare eligible.

A retired couple had a bit of a complex situation. Both are just turning 65. The male does not have retiree coverage and was unsure if he would receive a benefit from his spouse’s plan.

One complication was where the couple will land in retirement. They are in a suburban county of a large state right now and MA plans are plentiful and strong. But areas of the country that they are thinking of moving to have less MA penetration and benefits are not as strong.

Because of the uncertainty on spousal coverage at the time and where they would live, I recommended that he enroll in FFS and get Medicare Supplement, which was pretty affordable at his age. We ran the numbers and told him what the costs would be. I explained that if they moved to a strong MA area, he could drop FFS and go to MA later, but that it was more difficult to do the opposite in some states. The state they are in now and those they are looking at are not strong, expansive guaranteed issue states.

The spouse did get a summary of benefits and we learned that her wrap was an MA supplemental wrap plan, known as an EGWP. The interesting thing about this plan is that it in essence mirrored an FFS plan, where percentage cost-sharing is assessed on almost every service but there is a great $1,000 medical MOOP and the standard $2,000 Part D MOOP. In addition, it had both in-network (the national plan’s network nationwide) and out-of-network (every other Medicare provider in the nation). The plan also offered some supplemental benefits for vision, dental, and more. At $70 a month, this was a tremendous deal for her and much better than enrolling in FFS and getting a supplement plan.

What’s more, we learned that her husband could enroll as well for a premium of $350 a month. In the short term, the FFS and supplement option we designed would have been cheaper, but he would not get the dental and vision and supplement rates would increase over time. For about $50 or $60 a month more, he decided to enroll as a spouse in his wife’s MA retiree coverage because it solves the network dilemma tied to their likely move and offers one-stop shopping.

Some advice and observations:

If you do not know where you will settle in retirement, think about your options very closely between MA and FFS.
In this case, the male leveraged his spouse’s benefits very well. Always look at spousal options.
Employers more and more are converting to EGWPs to reduce costs. Sometimes that can be a bad thing, but for employers looking to craft national coverage it can be a very good thing.

Young couple just married. Healthy. Children on the horizon.

A young couple called me with the question about what they should do in their first open enrollment as a married couple. Both of their companies had rather strong benefits and were somewhat generous on employee subsidies. One was less so on family coverage. But there was concern about what would happen if one stopped working due to pregnancy.

This was easy. I recommended they both stay on their own coverage for now. The female had stronger overall benefits and could include a newborn on her coverage. If one of them stopped working, this would be a life event, which would allow a spouse or child to migrate to other coverage.

Some advice and observations:

While the above was a no-brainer, it might not always be the case. While there are protections in the Affordable Care Act (ACA) as to coverage in the employer world, self-insured employers have some leeway and coverage can be very different between employers. So, in some cases it might make more sense to take family coverage from one employer rather than splitting up the family. But always look at both options.
Also, take a look at benefits. A good example is fertility coverage. Some employers offer it and others don’t.

Kitty – my daughter who had brain surgery earlier this year.

I have done a number of blogs on my courageous daughter choosing to have brain surgery. All turned out great. My daughter went to college for both her bachelor’s and graduate degree in the United Kingdom. She is now living there on a two-year extended visa. She is looking for full-time work in her field. She has a discrete period of time to find that work. At the same time, she is searching for work in her field in the U.S. and other countries. She has U.K. healthcare coverage.

Because she had brain surgery in America and has a year’s worth of expensive follow-ups here, I have maintained coverage in the United States. I have maintained very strong Platinum Exchange coverage for her because of her then-brain condition, possible need for surgery, and expensive medications.

Thankfully, all symptoms are gone, including debilitating headaches, but some migraines could return. The severe headaches were likely both a result of the brain malformation and a family history of migraines.

Because she could end up back here in the United States, I always planned to continue coverage post-surgery. While follow-ups are occurring early this year when she is home, I had hoped to move her from a very expensive Platinum plan to a Silver plan. But in researching this, what I quickly found was the following:

Silver is still very expensive without a subsidy. She does not get a subsidy for several reasons, including the fact that Florida has not expanded Medicaid.
Silver has high deductibles and more and more services are being subjected to deductibles, including drugs.
Silver has very high MOOPs as well.

When I considered all this, I decided to keep my daughter on a Platinum plan for another year at a now huge rate of $850 per month. That compares to about $600 for Silver. While there is a $250 difference, the truth is that the follow-ups on a Silver plan would cost between $1,000 and $1,500 on a Silver plan as compared with no more than a few hundred dollars on Platinum. In addition, if she does need any of her expensive medications again, they would be subject to the deductible as well as cost several hundred a month on a Silver plan. On Platinum, there is a reasonable co-pay for each. Platinum also has a $0 deductible and very low MOOP. When all is said and done, the additional $3,000 of Platinum premium cost is worth it. We could spend more on Silver than Platinum depending on what the future holds and we have better security.

I admit not everyone has the ability to make the decision to do this, but my main point here is that Silver coverage for those not getting premium and cost-sharing subsidies has become hugely expensive and accessing care is financially very difficult. How does someone pay $600 a month for individual coverage and then face huge deductibles, cost-sharing, and MOOPs. It is a huge problem.

Advice and observations:

While I am a huge supporter of the ACA and Exchanges, premiums and cost-sharing are again increasing dramatically. It is a huge problem.
If you can get a premium and a cost-sharing subsidy take it. Otherwise, you could be paying a great deal and still have a huge problem truly affording to access your benefits.
If you can afford it, run the numbers on the difference between lower tier Exchange plans and higher ones. You could find richer plans cost less than less generous ones.
And even if you have to choose a lower metal plan in the Exchanges, drug manufacturer cost-sharing assistance can help you reduce the several hundred per month per drug you might have for expensive drugs. These cards may be capped at an annual amount, but it provides great relief.
Remember that Exchange plans are required under the ACA to cover preventive services at no cost. So even if you do have a high deductible and cost-sharing in some of the lower metal tiers, you can and should take advantage of obtaining preventive services. Many are unaware of this provision and are confused when they see their plan summary of benefits.

Conclusions

So let’s put this altogether. What have the use cases taught me about the healthcare system in general?

The American healthcare system is unreasonably complex and burdensome to plans, providers, and consumers. As you can see from these open enrollment cases, it is hard to make heads or tails of the system and insurance products. I am an expert and I have to admit I was mystified sometimes by what I had to research and the time it took me. In some of the cases above, I was talking to former doctors and nurses who unfortunately were confused as well. The complexity not only leads to consumer confusion, but to hundreds of millions in unnecessary administrative costs, errors, abuse, and fraud. The duplication in our system is incredible.
We have far too many lines of business and products and plan types within them. This is a product of an irrational system overall but also of a lack of uniform pricing and network strategies. While I favor continuation of employer coverage as our main access point, there is no doubt we could reduce the number of coverage programs and reform delivery.
While we have made progress toward access to healthcare, these use cases show that by no means do we have affordable access. Whether Medicare, Exchange or employer coverage, costs are increasing and premiums, deductibles, cost-sharing, and exceedingly high MOOPs serve as huge barriers to true access. This is especially the case for those who are medically complex. We are fast becoming a nation of underinsured if we are not uninsured.
It is easy to blame insurers for premium costs and plan benefit designs, but provider prices drive this. Costs in the system are out of control and we desperately need to tackle price in the system.
The high costs also serve as a barrier to excellence in primary care and care management. While more preventive services are at zero cost, too many services still require high cost-sharing and serve as a disincentive to manage chronic conditions and stay healthy.

#healthcare #healthcarereform #medicare #medigap #medsupp #medicareadvantage #partd #pdp #aca #exchanges #coverage #fehbp #employercoverage

— Marc S. Ryan