Are Medicare Advantage plans cherry picking healthier members?

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Medicare Advantage plans may be indirectly cherry picking healthier seniors--and therefore decreasing their coverage costs--by offering benefits such as gym memberships, suggested a New England Journal of Medicine study released Thursday.

The study compared seniors in Medicare Advantage plans with gym memberships to seniors in other plans without the gym benefits and to the plans' old membership before it started paying gym fees. It found that Medicare Advantage enrollees who sign up for a plan with a gym membership are healthier, The Washington Post reported.

Specifically, 35 percent of seniors enrolled in Medicare Advantage plans with fitness benefits reported being in "excellent" or "very good" health. In contrast, only 29 percent of seniors in plans without the benefit were in such good health, according to Bloomberg.

Laws prohibit Medicare Advantage plans from denying coverage based on illness or pre-existing conditions or from using strategies to attract healthier patients. "Even with important components in place to promote more balanced risk pools--standard benefits packages, risk-adjusted payment, and guaranteed coverage--some Medicare Advantage plans may engage in favorable selection by designing insurance benefits that selectively appeal to healthy persons," the study authors wrote.

Although the federal government didn't intend for Medicare Advantage plans to "cherry pick" the healthiest patients, insurers "have still found a way to do that in a market that's very regulated," study coauthor Amal Trivedi, assistant professor of health services, policy and practice at Brown University, told Bloomberg.

And the trend is becoming more popular as 58 Medicare Advantage plans offered gym memberships in 2008, compared with only 14 in 2002, reported HealthDay News. "What this suggests is that offering gym memberships is an attractive business proposition," Trivedi said.

However, insurers operating Medicare Advantage plans with the gym memberships took issue with the study findings. Cigna's Medicare Advantage HMO plan, for example, "isn't part of a strategy to get a healthier risk pool, but part of our overall health and wellness strategy, which aligns with Cigna's mission to help the people we serve improve their health, well-being and sense of security," Leigh Woodward, Cigna spokeswoman, told Bloomberg.

To learn more:
- read the New England Journal of Medicine study
- check out the Bloomberg article
- check out the HealthDay News article
- see the Washington Post article

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