Do Medicare Advantage plans cater to healthier members?
New research continues to support claims that insurers administering Medicare Advantage plans are "cherry picking" members to lower their coverage costs while still receiving the same government-provided funds to administer the program.
Medicare Advantage plans, which offer less expensive premiums than traditional Medicare, have seen an increase in enrollment to more than 13 million people. But some industry analysts say the set fee for each Medicare Advantage member paid by the Centers for Medicare & Medicaid Services incentivizes insurance companies to choose the healthiest consumers, leaving the sickest and most expensive consumers in Medicare, reported Kaiser Health News.
Moreover, seniors who leave their Medicare Advantage plan for traditional Medicare have more significant and expensive health problems, concludes a new study from CMS researcher Gerald Riley. The study found that the more than 240,000 seniors who left their Medicare Advantage plans in 2007 had an average of $1,021 in monthly medical costs for six months after leaving the private plans, whereas Medicare members who stayed enrolled in the traditional program the entire time cost only $710 a month.
The findings suggest "a pattern of selective disenrollment," which could be initiated by Medicare Advantage insurers themselves by, for example, cutting access to care or covering fewer costs of care for chronically ill members, the study found.
However, America's Health Insurance Plans pushed back on the increasing criticism of Medicare Advantage, saying HHS has implemented certain protections to guarantee insurers provide equal care for sick members. "CMS reviews these plans every single year specifically to make sure they are not discriminating against any kind of beneficiaries," AHIP Spokesperson Robert Zirkelbach told KHN.
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Are Medicare Advantage plans cherry picking healthier members?