The enrollment period for Medicare ends on Dec. 7 — and many people across the nation are deciding about supplementing Medicare with Medicare Advantage plans.
Medicare Advantage plans, which are plans offered through private insurer companies that the federal government contracts with, are advertised as a solution to original Medicare’s limited scope in coverage, but have been embroiled in scandals from predatory marketing to submitting inaccurate patient diagnosis data for additional payments from the Centers for Medicare and Medicaid Services (CMS)
These plans are also overcharging taxpayers between $88 billion to $140 billion a year, according to a report released earlier this fall by Physicians for a National Health Program, an organization of physicians and health care workers that advocates for a single-payer health care system.
In Nevada, Medicare Advantage plans have an “outsize impact on the finances” on the critical access hospitals in the state’s vast rural areas, according to a 2023 NPR article published in partnership with KFF.
These hospitals receive more funds from Medicare to compensate for the lower patient volumes — allowing them to operate in areas where care is needed but costly. But Medicare Advantage plans offer rates lower than these and are slow to pay or don’t pay for the care provided by the hospitals, according to hospital operators interviewed in that article.
The Nevada Rural Hospital Partners, an alliance of 13 small and rural Critical Access hospitals in the state, did not respond to comment by the publication of this story.
Original Medicare is a two-part fee-for-service plan where Part A pays for hospital insurance and Part B pays for medical insurance. Enrollees can enroll in Part D for a separate drug coverage.
Medicare Advantage, or Part C, offers vision, hearing, and dental services — enrollees must use doctors who are in the plan’s network and often need to get pre-approval from the plan for certain drugs or services to be covered. Traditional Medicare allows enrollees to use any hospital and provider and doesn’t require preauthorization.
In 2023, for the first time, more than half of Medicare-eligible people, 51%, are enrolled in a Medicare Advantage plan, accounting for 54% of total federal Medicare spending (net of premiums). A decade ago, only 29% of the eligible Medicare population were enrolled in a Medicare Advantage plan, according to KFF.
Policy changes like the Medicare Modernization Act of 2003, which created stronger financial incentives for private insurance companies to participate in Medicare Advantage programs, and the Affordable Care Act, which requires Medicare to make quality bonus payments to Medicare Advantage plans if they receive a 4-star or above on the 5-star quality rating system, helped spur the growth of Medicare Advantage plans.
By 2033 an estimated 62% of those eligible for Medicare are projected to be purchasing Medicare Advantage plans, according to projections from the Congressional Budget Office.
In Nevada, 54% of people eligible for Medicare are enrolled in a Medicare Advantage plan, slightly above the national average, according to the KFF.
Democratic Nevada Sens. Jacky Rosen and Catherine Cortez Masto signed a letter urging the Biden-Harris administration to continue the support of Medicare Advantage and “provide a stable rate and policy environment for Medicare Advantage that will strengthen and ensure the long-term sustainability of the program” earlier this year after the Administration proposed changes to the program.
However, there has been a steady increase in concerns over the profits private insurance companies are reaping through Medicare Advantage.
“Various elements of MA, either by design or by consequence, result in a much higher level of government spending than is necessary to provide Medicare benefits, with much of this money going toward corporate profits,” the Physicians for a National Health Program report notes.
U.S. Democratic Sens. Elizabeth Warren (MA) and Jeff Merkley (OR) echoed concerns about the profitability of the seven major Medicare Advantage health care insurance companies who opposed proposed changes to CMS payment rates in 2024 in a letter to these companies.
Merkley and Warren pointed out that UnitedHealthcare, CVS/Aetna, Elevance Health, Humana, Centene, Molina, Cigna, Elevance Health, Humana, Centene, and Molina all brought in billions of dollars of profit from these federal contracts.
Cigna entered into a $172 million settlement with the Department of Justice for submitting inaccurate patient diagnosis data for more payments from CMS in September.
In November, the Biden-Harris administration announced support for the CMS proposed rules that would begin in the 2025 contract year and include access to behavioral health services, including outpatient care like mental health counselors, documenting denials of Special Supplemental Benefits for the Chronically Ill instead of approvals, and require contracted insurers to add experts in health equity to their utilization management committees to address prior authorization policies that impact underserved enrollees.
Insurers have pushed back against the changes, citing a hit to their profits that would compromise care and increase costs to consumers. Earlier this year, health care consulting firm Avalere released a report contending the changes would increase premiums or decrease funding for supplemental benefits like hearing aids or dental care. The report was funded by Better Medicare Alliance (BMA), which advocates for Medicare Advantage plans on behalf of UnitedHealth Group, Aetna and Humana.
“BMA supports efforts to increase transparency and access for Medicare Advantage beneficiaries,” Mary Beth Donahue, the president and CEO of BMA, said in a statement regarding the proposed changes by CMS.
BMA released alternative policy changes to include enhanced oversight of companies engaging in predatory marketing and establishment of a code of conduct, requiring insurers to provide Medicaid Advantage enrollees with “clear, detailed, easily accessible information” for their policies to avoid pre-authorization issues (Traditional Medicare does not require preauthorization), and promote mental and behavioral health care to be offered through primary care visits.
The BMA administration’s proposed policy changes don’t mention any solution to the criticisms that the companies are overbilling providers, nor do they address penalties for enforcing predatory marketing practices or for submitting inaccurate patient diagnosis data.
Public comment for the changes is open for 60 days and ends on Jan. 5, 2024, at 5 p.m, those interested can submit their comments here.