Complex patients more likely to switch from Medicare Advantage

Female doctor holding application form while consulting patient

Medicare Advantage plans might not be meeting the needs of patients requiring the costliest and most complex levels of care, a new study suggests.

Between 2010 and 2011, such patients were more likely to switch from Medicare Advantage plans to traditional Medicare, rather than vice versa, researchers found.

The results suggest people should carefully consider all the benefits, payments and quality measures before enrolling in Medicare Advantage plans, said lead author Momotazur Rahman of Brown University in Providence, Rhode Island.

Unlike traditional Medicare, which is the U.S. health insurance program for the elderly and disabled, Medicare Advantage is offered by private insurance companies. While the plans cover all services provided under traditional Medicare, Advantage plans may also include added services like eye and dental coverage. They may also charge different out-of-pocket costs and offer access to different sets of providers.

At the beginning of each month, the government pays Medicare Advantage companies a lump sum to cover enrollees' expenses - with higher sums for high-risk patients. The plans must follow rules set by the federal government.

Rahman and his colleagues write in Health Affairs that lump sums encourage companies to keep healthcare costs low. But there's been some concern that companies were maximizing profits by enrolling healthier people, whereas traditional Medicare is obligated to enroll all comers.

According to the authors of the new study, legislation in 2003 aimed to address those concerns, and research suggests it helped close the gap in deaths and healthcare use and spending between people in the two types of plans.

Other studies, however, have suggested Advantage plans were still overpaid under the new system and switching between plans was limited to those needing the most care.

For the new study, the researchers used data on more than 36,000 Medicare beneficiaries, about a quarter of whom were enrolled in Medicare Advantage plans, to see how many switched from one type of plan to the other over the course of a year.

Overall, there was little difference, with 4 percent of traditional Medicare beneficiaries switching, compared to 5 percent of those in Medicare Advantage plans.

But there was a difference when the researchers looked at people requiring complex care - with more switching away from Medicare Advantage plans than from traditional Medicare.

For example, 17 percent of people in nursing homes for long stays switched from Medicare Advantage to traditional Medicare between 2010 and 2011, while only 3 percent moved in the opposite direction.

Also, 8 percent of people receiving home healthcare switched from Medicare Advantage during that time, compared to 3 percent switching from traditional Medicare.

The results were more exaggerated for people enrolled in both Medicare and Medicaid, the U.S. health insurance program for the poor. Those people are allowed to switch anytime and usually use increasingly expensive care, Rahman said.

It's not clear why people needing higher levels of care are more likely to switch out of Medicare Advantage plans, said Gretchen Jacobson, associate director with the Kaiser Family Foundation���s Program on Medicare Policy in Washington, D.C.

For example, it could be due to limited provider networks, unused extra benefits or prescription drug needs, said Jacobson, who wasn't involved with the new study.

However, she said, it's important to point out that the vast majority of people remain in their chosen programs.

"Most people are not changing when they make an initial decision about their coverage, but this is an area that���s ripe for more research," she said.

A representative of America's Health Insurance Plans (AHIP) also stressed that the study only looked at one point in time, and changes for Medicare Advantage plans were adopted since that period.

"More specifically, enrollment in Medicare Advantage has continued to increase year after year as program continues to offer coordinated care that leads to better outcomes for seniors and those with chronic conditions," said AHIP's Clare Krusing.

"If the type of disenrollment that was highlighted in this study was as pervasive as the authors suggest, there would be much greater evidence that beneficiaries were leaving the program in significant numbers," she said.