Older adults and people with disabilities have the choice of private health plans that offer Medicare benefits, sometimes called Medicare Advantage plans. Through an analysis of mortality rates at different Medicare Advantage plans, Jason Abaluck, Associate Professor of Economics, Yale University and colleagues at Brown University, University of Chicago and Northwestern University, found that the wrong choice of Medicare Advantage plan could kill you. The government would save thousands of lives if it terminated contracts with Medicare Advantage plans that have high mortality rates.
After studying mortality rates in hundreds of Medicare Advantage plans with 15 million enrollees over five years, the researchers determined that people who choose the wrong Medicare Advantage plan have a much higher risk of dying. Put differently, your choice of health insurer affects how long you will live, along with other health outcomes.
The researchers suggest that giving people the ability to choose between a plan that has their primary care doctor in network and one that saves them money is crazy. And, who knows which of these plans will prolong people’s lives and which will shorten them?
They recognize that people cannot make good choices. They further recognize that the private health insurance market is broken. The Medicare Advantage plans have very little reason to put money towards keeping people healthier. In fact, some have mortality rates as high as eight percent–one in twelve of their members die each year; others have mortality rates of two percent.
The researchers looked specifically at what happened to people’s mortality rates when they switched out of one Medicare Advantage plan and into a different Medicare Advantage plan. They found that a Medicare Advantage plan’s mortality rate had a direct effect on whether a person lived or died.
To be clear, people have no clue what the mortality rate is for a given Medicare Advantage plan. That data is not publicly reported. And, star-ratings of Medicare Advantage plans are of no help.
The researchers say that Medicare Advantage plans with higher premiums and better drug coverage tend to have better health outcomes. But, these two factors alone will not tell you whether you have a better chance of survival in a particular Medicare Advantage plan.
What’s the solution? The researchers recommend that the government terminate contracts with Medicare Advantage plans that have the highest mortality rates. By so doing, the government could save around 10,000 lives a year. The better solution: Terminate all Medicare Advantage plans, eliminate out-of-pocket costs in traditional Medicare and move everyone into traditional Medicare or, better still, Medicare for All.
Here’s more from Just Care:
- Ten ways Medicare Advantage plans differ from traditional Medicare
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Medicare ratings of Medicare Advantage plans a farce
- Ten ways Medicare Advantage plans differ from traditional Medicare
- People with serious health needs more likely to disenroll from Medicare Advantage plans
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