Medicare Advantage patients see more care delays, struggle with affordability

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In comparison to their traditional Medicare counterparts, Medicare Advantage patients are more likely to experience delays in care (22% vs. 13% for original Medicare). The delays in care for MA patients were largely due to the need to get prior approval, or authorization, according to a Commonwealth Fund survey.

MA beneficiaries are also less able to afford care due to copayments or deductibles (12% vs. 7% for original Medicare beneficiaries).  

The survey asked a nationally representative sample of 3,280 Medicare beneficiaries aged 18 and older about the value of their care as measured by access to benefits, services, providers, care coordination and satisfaction.

Among beneficiaries reporting a challenge in getting care, about a third in MA plans (33%) and a third in traditional Medicare (32%) said the problem occurred when trying to access primary care. Smaller shares said the challenge occurred when trying to get surgery (13% for MA plans and 15% for traditional Medicare), physical therapy or rehabilitative care (13% for both), or cardiology care (13% vs. 10%).

About one in six beneficiaries said they were told to go to urgent care because their provider had no appointments available, with no significant difference between people with MA or traditional Medicare (16% vs. 18%).

WHAT'S THE IMPACT?

By most measures, the federal government has always paid MA plans more than what it would cost to cover similar people in traditional Medicare, authors said. Although estimates vary, one study finds that plans were overpaid by more than $27 billion in 2023. These overpayments have raised questions about whether MA enrollees receive greater value that merits the extra cost to Medicare.

MA plans typically provide benefits not covered by traditional Medicare, such as some coverage for vision, hearing, or dental services, and they can help to coordinate enrollees' care, as well as limit their out-of-pocket costs for Medicare-covered benefits. Traditional Medicare, meanwhile, allows beneficiaries to see any provider without the need to obtain prior authorization or a referral – which MA plans often require – and offers a larger selection of Part D plans for prescription drug coverage.

Whether enrolled in Medicare Advantage or traditional Medicare, about two in three beneficiaries overall said their coverage has fully met their expectations, the survey found. Those who said it fell short of expectations pointed to a lack of coverage for needed services, high costs or uncertainty about what benefits are covered.

Three in five beneficiaries in MA plans and one-quarter in traditional Medicare said they were asked to undergo a health assessment, which most frequently resulted in a discussion with their doctor. Few said it resulted in any changes to their care plan or in more services or benefits being offered.

Seven in 10 beneficiaries in MA said they used some of their plan's supplemental benefits in the past year; three in 10 did not use any. Four in 10 reported using their dental or vision benefits or an allowance for over-the-counter medications.

Whether enrolled in Medicare Advantage or traditional Medicare, beneficiaries reported similar access to benefits, services and providers, as well as similar challenges and experiences. Overall, one-third of beneficiaries indicated their coverage fell short of their expectations.

THE LARGER TREND

While Medicare Advantage remains attractive to the healthcare industry due to strong growth, high revenue and earnings per member, profitability is on the decline, a Moody's analysis found this month.

MA performance has remained under pressure in 2023 because of a significant spike in utilization for most of the companies, which Moody's expects will result in lower full-year MA earnings for insurers. Adding to that is lower reimbursement rates for the first time in years that are likely to remain weaker in 2025 and 2026, which is credit negative.

Moody's analysts contend that MA may have "lost its luster," citing as evidence Cigna's efforts to sell its MA business, even after a failed merger with Humana. Cigna recently announced it had entered into a definitive agreement to sell its Medicare Advantage, Supplemental Benefits, Medicare Part D and CareAllies businesses to Health Care Service Corporation (HCSC) for about $3.7 billion.

Despite the challenges, MA remains popular with seniors, boasting lower out-of-pocket costs and premiums than traditional Medicare. Analysts cited a 2023 Milliman report showing annual estimated healthcare costs per beneficiary are $3,138 compared to $5,000 for traditional Medicare fee-for-service, and over $5,700 if a traditional Medicare beneficiary also buys a Medigap plan. Besides the lower cost, MA also offers additional benefits such as dental, vision and hearing, which are not covered by traditional Medicare.

MA membership has grown nationally at an annual rate of 8% to approximately 32 million, while traditional Medicare has declined at an average annual rate of 1%. Over that time, the percentage of people choosing MA has grown to 49% from 28%.

Last fall, the Centers for Medicare and Medicaid Services released the Medicare Advantage, Part C and Medicare Part D Star Ratings that rank MA plans by the quality of health and drug services received by consumers. Thirty-one contracts for both Medicare Advantage and the Part D drug plan earned 5 stars, compared to 57 in 2023. Four contracts received the low overall ranking of 2 stars, the same number as in 2023.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.