There’s a lot that we don’t know about Medicare Advantage, the part of Medicare that is administered by private health insurers. But, one thing we do know is that Medicare Advantage is costing taxpayers more than traditional Medicare and driving up Medicare Part B premiums. What are we paying extra for?
The latest paper from the Commonwealth Fund suggests that there is no justification for Medicare Advantage’s higher per enrollee costs. The paper reports on survey data showing that MA enrollees are very similar to traditional Medicare enrollees. Their populations are about the same. People report high satisfaction with the quality of care they receive be they in traditional Medicare or Medicare Advantage. About one third of people in both types of plans report cost related barriers to care.
The survey data also suggest that hospitalizations and emergency room visits are about the same in traditional Medicare and Medicare Advantage. And, the survey data suggest that health outcomes are about the same.
We are now paying about 4 percent more for enrollees in Medicare Advantage than traditional Medicare, and Medicare Advantage plan profit margins are around 4.5 percent. The survey data suggests that there’s no advantage to paying more. It would be less costly to put an out-of-pocket cap in traditional Medicare and end Medicare Advantage.
Both taxpayers and people with Medicare would save money if Medicare Advantage were not an option. People with Medicare pay higher Part B premiums because of Medicare Advantage’s higher per enrollee costs. Higher payments to Medicare Advantage is eroding the Medicare Trust Fund more quickly. That said, it would be essential for traditional Medicare to have an out-of-pocket cap to protect everyone in it from what could be astronomical costs.
There’s even more reason to question the value of Medicare Advantage. Survey data does not tell the whole story, likely because the people in the poorest health are not able to complete the survey. Objective data focused on access to care issues in Medicare indicates that Medicare Advantage plans are less able to meet the health care needs of their enrollees.
What’s the evidence that Medicare Advantage is not as good as traditional Medicare in meeting people’s health care needs? People with serious health care needs tend to leave Medicare Advantage at disproportionately high rates for traditional Medicare, suggesting that Medicare Advantage is not meeting their needs and that people in traditional Medicare are less healthy. In addition, the Department of Health and Human Services Office of the Inspector General found widespread inappropriate delays and denials of care in Medicare Advantage. And, the Kaiser Family Foundation found greater cost-related barriers to care in Medicare Advantage, particularly for people with serious health conditions and modest incomes.
Here’s more from Just Care:
- Well-kept secrets of Medicare Advantage plans
- The Medicare Advantage scam and beyond
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Ten ways Medicare Advantage plans differ from traditional Medicare
- Medicare Open Enrollment: Don’t trust insurance agents
Leave a Reply