If you’re enrolled in a Medicare Advantage plan, you could be benefiting from billions of taxpayer dollars in overpayments to Medicare Advantage (MA) plans. More likely, you could be suffering from widespread and persistent inappropriate delays and denials of care and ghost networks, without doctors who are willing to take your insurance. One thing’s for sure, there’s little you can count on about your MA coverage.
In addition, notwithstanding the government’s massive overpayments to Medicare Advantage plans, millions of people in Medicare Advantage plans struggle to afford their care. Between high copays, inappropriate denials and narrow networks that keep people from seeing the health care providers they want to see, people in Medicare Advantage are at risk of not getting the care they need. The federal government does not name the bad Medicare Advantage actors, so people are left to choose blindly among MA plans.
Moreover, a new study in Health Affairs out of the Brown University School of Public Health finds that the way our federal government sets the benchmark for paying Medicare Advantage plans–how it determines how much to pay for each enrollee–is seriously flawed. As a result, the researchers find that the federal government overpaid Medicare Advantage plans by an average of $9.3 billion a year in 2017, 2018, 2019 and 2020. What will the Congress and the Biden administration do about this huge payment defect?
To be clear, $9.8 billion a year in Medicare Advantage overpayments from using a flawed benchmark is only a piece of the overpayment problem. Another study out of the University of Southern California found that the federal government is overpaying Medicare Advantage plans $75 billion this year. Medicare Advantage enrollees are healthier, overall, than enrollees in Traditional Medicare, but the government pays MA plans as if their enrollees are less healthy than enrollees in Traditional Medicare.
The Brown University researchers call for the government to change the way it adjusts for risk when it sets the amount it pays for each enrollee in Medicare Advantage in order to offset the $9.8 billion in overpayments to Medicare Advantage plans. Truth be told, no one has come up with a good way to design a payment system that does not lead to inappropriate payments. Moreover, no one has come up with a way to incentivize MA plans to cover the care people need, without delay, from the best health care providers.
The Medicare Payment Advisory Commission has determined that, all told, the government overpays Medicare Advantage plans by 19 percent; it pays these plans 119 percent of what it spends in Traditional Medicare. It’s time to end the defective capitated risk-adjusted payment system and pay the MA plans differently.
Here’s more from Just Care:
- Congress sits on its hands while Medicare Advantage insurers gouge taxpayers and enrollees
- OIG finds widespread inappropriate care denials in Medicare Advantage
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- People in Medicare Advantage struggle to afford their care
- You still can’t trust Medicare Advantage plan provider directories
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