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Sicker Patients Seem at a Disadvantage With Medicare Advantage

New evidence suggests Medicare Advantage may not serve some sicker Medicare beneficiaries as well as it does healthier ones.

Medicare Advantage’s private health insurance plans offer at least the same benefits as the public, traditional Medicare program for older Americans, as well as some who are disabled or have certain diseases. The private plans may also offer additional benefits not available from traditional Medicare — like coverage for hearing aids and eyeglasses — and lower patient cost sharing. These features make Medicare Advantage attractive and help explain why the program is surging in popularity.

But several new studies raise doubt about whether Medicare Advantage plans are as good as traditional Medicare for all beneficiaries. Though some evidence suggests Medicare Advantage plans offer higher quality and greater efficiency than traditional Medicare, that may not benefit some sicker people — like those needing hospitalization, home health care or nursing home care — or those with certain mental illnesses, like depression.

One way the plans may disadvantage some sicker beneficiaries is by making care harder to get. Many Medicare Advantage plans try to manage care, sometimes requiring pre-approval or a doctor’s referral for certain services. Some of these care management practices may promote more efficient use of health care resources. A study by Katherine Baicker of Harvard and Jacob Robbins of Brown showed that managed care practice patterns spill over into traditional Medicare, increasing efficiency in that program as well.

Another study by the economists Mark Duggan of Stanford, Jonathan Gruber of M.I.T. and Boris Vabson of Nuna Health and Wharton found that Medicare Advantage enrollees travel farther to visit hospitals than patients in traditional Medicare do. Perhaps in part for this reason, they found that Medicare Advantage enrollees used fewer hospital services, though they were no worse off for it. But to achieve efficiencies, the private Medicare plans can exclude some doctors and hospitals from their networks. A Government Accountability Office report released last year documented weak standards for Medicare Advantage plan networks and lax oversight, raising the possibility that all types of patients do not get equal access to care. Because sicker beneficiaries need more care, restrictions on access hit them hardest. Consider, for instance, patients reporting symptoms of depression. Such patients may have difficulty understanding health plan features and more trouble navigating the additional steps in obtaining care that some private plans impose. Steven Martino, a behavioral scientist with RAND, and his colleagues recently studied the experience of such people with Medicare Advantage and compared it with those with traditional Medicare. Their analysis, published in the journal Health Services Research, found that though the care they received did not differ, Medicare Advantage enrollees with depressive symptoms reported more difficulty getting needed care and drugs, and rated their experience with the private plans as worse than those in traditional Medicare. In other words, the findings point to worse experiences with private plans, not health care providers.

Another recent study, by the Brown assistant professor Momotazur Rahman and colleagues, found that patients who have been hospitalized or have used home health or nursing home services — all indicating worse health or greater frailty — were more likely to switch from Medicare Advantage to traditional Medicare than vice versa. Such skewed switching rates suggest Medicare Advantage doesn’t serve certain patients well. Rates for switching out of Medicare Advantage are particularly high for lower-income seniors also enrolled in Medicaid. Such a person who also used home health or nursing home services was three to six times more likely to switch to traditional Medicare than a similar traditional Medicare enrollee was to switch to Medicare Advantage. Older studies also found that sicker people tended to prefer traditional Medicare and were more likely to leave Medicare H.M.O.s. And other, more recent studies found that lower-income, less educated and sicker people reported worse experiences in Medicare Advantage than in traditional Medicare. Though Medicare Advantage may be a less attractive option for some patients, in some cases that could be because it more effectively limits wasteful or fraudulent care than traditional Medicare. For example, the traditional program has, at times, experienced rampant home health care fraud. It’s also worth noting that even if Medicare Advantage doesn’t serve some sicker patients as well as traditional Medicare on average, experience can vary within groups.

DaleyCare's thoughts: "Although the author has a very good point about sicker patients having a disadvantage when it comes to Medicare Advantage plans, we do not think original Medicare is the best option. Original Medicare leaves Medicare beneficiaries responsible for roughly 20% of their healthcare costs. At the very least, a Medicare Advantage plan puts a ceiling on the max out of pocket costs. For a new Medicare beneficiary (whether due to turning 65 or receiving Medicare as a disability benefit) with health problems, we highly recommend considering a Medicare supplement. We are big fans of Plan F, G, and N. The premiums are not too terrible these days and they cover the 20% Medicare does not cover. Supplements are the best coverage for someone with health issues who does not want to carry risk. There are definitely advantages and disadvantages to both coverage routes and both are much better than original Medicare alone, but there is no one-size-fits all coverage solution. Every person's health and financial situation is different. That's why it it important to find an agent who will find a Medicare plan tailored to fit your needs and continue to review your coverage year to year."

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