Taxpayers Foot the Bill: Sickest Medicare Advantage Patients Switch to Traditional Medicare
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A recent examination into Medicare data has uncovered a troubling trend: the sickest and most expensive-to-insure Medicare Advantage (MA) plan members are increasingly abandoning their private plans in favor of traditional Medicare, shifting billions of dollars in costs to American taxpayers.
The Wall Street Journal’s analysis of medicare data revealed a pattern costing taxpayers dearly. The sickest Medicare Advantage patients are canceling their coverage precisely when their healthcare needs – and associated costs – escalate. this alarming trend, detailed in the November 11, 2024, article, “The Sickest Patients Are Fleeing Private Medicare Plans — Costing Taxpayers Billions,” highlights a meaningful financial burden on the federal government.
Reporters Anna Wilde Mathews, Christopher Weaver, and Tom McGinty explain that many switch to traditional Medicare after facing difficulties accessing necessary care. In their final year of life, these individuals effectively transfer the cost of their care from private insurers to the federal government.
“If those beneficiaries had stayed in their plans, the government would have paid the insurers about $3.5 billion in premiums, meaning the companies netted more than $6 billion in savings during that period,” the reporters calculated, highlighting that MA insurers avoided a collective $10 billion in medical costs from 2016 to 2022 due to this exodus.
Medicare Advantage plans, offered by private insurers to seniors and the disabled, are designed to provide equivalent benefits to traditional Medicare. Their appeal lies in lower out-of-pocket costs and frequently enough include supplemental benefits like dental care and gym memberships. Tho, the WSJ article points out a critical drawback.
“as recipients get sicker, though, they may have more difficulty accessing services than people with traditional Medicare,” Mathews, weaver, and McGinty wrote. “That’s because the insurers actively manage the care,including requiring patients to get approval for certain services and limiting which hospitals and doctors patients can use.”
The WSJ analysis showed a stark disparity: from 2016 to 2022,seniors in their final year of life left Medicare Advantage plans for traditional Medicare at twice the rate of other enrollees. “Those private-plan dropouts — 300,075 during that time span — often had long hospital and nursing-home stays after they left, running up large bills that taxpayers, not their former insurers, had to pay,” the reporters explained.
These departing seniors cost the federal government an average of $218 a day during this period, more than seven times the cost of a typical Medicare recipient and roughly double the cost of other recipients in their final year of life, according to the WSJ. importantly, the analysis excluded hospice expenses, typically covered by traditional Medicare.
Further research from the Kaiser Family Foundation (KFF) provides additional context on this trend in their report,”Medicare Spending was 27% More for People who Disenrolled from Medicare Advantage than for Similar People in Traditional Medicare.”
Medicare Advantage exitus: Why are the Sickest Switching to Conventional Medicare?
A recent examination into Medicare data has revealed a concerning trend: the most ill and expensive-to-insure Medicare Advantage (MA) plan members are increasingly switching to traditional Medicare, shifting billions of dollars in costs to taxpayers. This exodus of the sickest patients from MA plans is raising alarm bells about the financial burden on the federal government.
In Conversation with Dr. Emily Parker, Healthcare Policy Expert
Catherine taylor, Senior Editor, World-Today-News.com
Welcome, Dr. Parker. Yoru expertise in healthcare policy makes you uniquely qualified to help our readers understand this complex issue. Let’s start by getting your take on the main findings of this recent Wall Street Journal investigation.
Dr. Emily Parker, Healthcare Policy Expert
Thanks for having me, Catherine. the WSJ article paints a pretty clear picture, and it’s definitely concerning. What we’re seeing is a pattern where the sickest MA enrollees – those who require the most costly care – are leaving their private plans for traditional Medicare at a much higher rate than their healthier counterparts. this happens precisely when their healthcare needs and costs are escalating the most.
Catherine Taylor
So, essentially, private insurers are avoiding the highest costs by having these patients switch to a government-funded system?
Dr. Emily Parker
That appears to be the case.The Wall Street Journal calculated that MA insurers saved over $6 billion between 2016 and 2022 becuase of this trend. As these patients switch to traditional Medicare, the financial burden shifts to taxpayers.
Catherine Taylor
That’s a staggering amount. The article mentions that accessing care can be more difficult within Medicare Advantage plans. Can you elaborate on that?
Dr. Emily Parker
Certainly. MA plans are designed to manage costs, which sometimes means putting restrictions on patients’ access to certain services and providers. This can involve requiring pre-authorization for treatments or limiting the hospitals and doctors within their network. For patients facing serious health challenges, these restrictions can be quite problematic.
Catherine Taylor
It seems like there’s a potential conflict of interest here – insurers profiting while pushing out their sickest members.
Dr. Emily Parker
You’ve hit the nail on the head. This situation raises serious ethical concerns. It’s crucial to find a sustainable solution that ensures access to quality care for all Medicare beneficiaries, regardless of their health status.
Catherine Taylor
Where do we go from here? What can be done to address this trend?
Dr. emily Parker
There are several possible ways forward. Strengthening regulations around MA plan practices, increasing clarity about costs and benefits, and exploring alternative payment models that incentivize high-quality care for all patients are crucial steps. We need a system that prioritizes both financial sustainability and the well-being of all individuals relying on medicare.
Catherine Taylor
Thank you so much for your insights, Dr. Parker. This is a critical issue that demands our attention.
Dr. Emily Parker
My pleasure. It’s imperative that we engage in a meaningful dialog about the future of Medicare and ensure a system that works for everyone.
