In a paper for JAMA Network, Adam Gaffney et al. suggest the time is ripe for cutting our losses in Medicare Advantage and strengthening traditional Medicare for two reasons. People in Medicare Advantage face obstacles to care and coverage that they need, endangering their health, that patients in traditional Medicare do not face. And insurers offering Medicare Advantage are charging the government tens of billions of dollars more than we spend in traditional Medicare, driving up Medicare costs.
No question mountains of data support Gaffney’s position. Just as people with commercial health insurance, people in Medicare Advantage face lots of challenges getting needed care. They must overcome myriad prior authorization requirements, especially when they need costly care, unlike people in traditional Medicare. And, they often struggle to see physicians and access hospitals they want to use.
Gaffney further suggests that incremental reforms to the MA payment and coverage systems will not fix these big problems. They are always too small. And, insurers find ways around them. Between 2007 and 2023, the government paid insurers $612 billion extra for covering their enrollees than it would have paid had these enrollees been in traditional Medicare. Of the money, $592 billion — 97 percent — went to insurer overhead and profits.
Today, people in Medicare Advantage plans receive nine percent fewer Medicare-covered services than people in traditional Medicare. For sure, these are the people who most need care. These are the people that Medicare Advantage plans try to avoid enrolling and, if they enroll, encourage to disenroll.
Moreover, Medicare Advantage plans do not have to set up shop in areas where they see few profits, and there’s no way to make them do so. The model is flawed at its core.
There’s no denying that people, overall, are happy in their Medicare Advantage plans. That’s because they have an out-of-pocket maximum rather than a need to buy supplemental coverage, as people in traditional Medicare do. And, it’s because they often get free gym memberships or some dental care or eyeglasses.
If people are healthy, they might be better off in Medicare Advantage. But, Medicare is paying an average of $13,000 on them, even though they don’t need care; they cost little or nothing. If they become ill, it can be a struggle for them. That’s not a workable health insurance model, particularly for older, frailer and more vulnerable Americans.
Here’s more from Just Care:
- Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- Ten ways Medicare Advantage plans differ from traditional Medicare
- New study finds you can’t meaningfully choose among Medicare Advantage plans
- OIG finds widespread inappropriate care denials in Medicare Advantage
- Three big Medicare access to care issues put vulnerable people at serious risk
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