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Better coverage for well retirees?

New research finds that many seniors who switch from their HMO-style Medicare Advantage plan to traditional Medicare have higher levels of significant health problems. That's fueling concerns that the private plans cater to more profitable, healthy beneficiaries but don't provide the most attractive care for the very ill.

More than 13 million people, a quarter of all Medicare beneficiaries, are enrolled in the private plans, which often offer lower premiums than traditional Medicare, as well as perks such as free gym memberships.

The federal government pays the plans a set fee for each enrollee, which some advocates say gives the plans incentive to skim off the lowest risks and leave the expensive patients to traditional Medicare.

A study released last week by Gerald Riley, a researcher at the Centers for Medicare & Medicaid Services, adds to those concerns. The study looked at more than 240,000 people who dropped out of Medicare Advantage in 2007. They used an average of $1,021 in medical services each month, while patients who remained in traditional Medicare the entire time cost $710 a month.

A Harvard study in the December issue of the journal Health Affairs found that people leaving Advantage plans were "much more likely than other beneficiaries to report health declines." Neither that study nor Riley's determined what motivated the changes.

"It may just be a benign motivation, that patients, when they're sick, want the freedom to go where they want," said Robert Berenson, a senior fellow at the Urban Institute.

In 2006, Medicare tried to crack down on switches by limiting them to once a year rather than monthly, an effort that has suceeded in reducing cherry picking, several studies found.

"CMS reviews these plans every single year specifically to make sure they are not discriminating against any kind of beneficiaries," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans. He also noted that other independent studies have found Medicare Advantage plans do a superior job in caring for enrollees. A report in the December Health Affairs found that people in the private plans were less likely to end up in the emergency room and get elective surgeries, and more likely to get certain recommended types of care.

Also, an analysis of patients in Florida, California and New York by the federal Agency for Healthcare Research and Quality determined people in private managed care plans were less likely to end up in the hospital.

But Riley's study noted the health law's reduction in payments to Medicare Advantage plans. "This may intensify pressure on plans to encourage selective disenrollment," he wrote. "Chronically ill enrollees may be more inclined to disenroll if access to care deteriorates or if plans cover a smaller portion of the costs of their care."

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy organization.

Better coverage for well retirees? 02/06/13 [Last modified: Wednesday, February 6, 2013 9:08pm]

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