Medicare Advantage insurers send you to low quality nursing homes

Most private health insurers offering Medicare Advantage plans are in the business of maximizing profits. Because the government pays them a flat fee for each of their enrollees, they have a powerful financial incentive to spend as little as possible on people’s care. New research out of Brown University, published in Health Affairs, comparing quality of care in nursing homes between Medicare Advantage and traditional Medicare, indicates poorer quality of care in Medicare Advantage.

One way Medicare Advantage plans control spending is through provider networks with physicians and hospitals that agree to accept lower fees. As one might imagine, researchers looking at quality of nursing home care in Medicare Advantage plans found that their nursing home networks tend to be of lower quality than nursing homes in traditional Medicare. Medicare Advantage plans are not willing to pay more to ensure their enrollees are receiving care in higher quality nursing homes. The better nursing homes likely want higher rates and do not want to deal with the administrative hassles that Medicare Advantage plans impose.

Researchers at Brown took a deep dive into the in-network nursing homes in Medicare Advantage plans to see how many their enrollees can choose from and the quality of care they deliver. They then compared access to nursing home care in Medicare Advantage plans with traditional Medicare. They found that Medicare Advantage enrollees were less likely to be admitted to the better nursing homes or to be admitted to the nursing homes nearest to where they live.

The researchers recommended that the government ensure that people enrolled in Medicare Advantage plans have better access to higher quality nursing homes. Of course, the government also needs to ensure that people get nursing home care when they need it; Medicare Advantage plans have also been found to deny nursing home stays inappropriately, another strike against the quality of care in Medicare Advantage.

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