- A recent study of the Medicare Advantage (MA) landscape shows that sicker members are leaving their plans in greater numbers than their healthy counterparts. The study by the non-partisan Government Accounting Office (GAO) evaluated 126 Medicare Advantage plans above the median rate of disenrollment and found that 35 of them had higher than average disenrollment rates particularly for members in poor health.
Beneficiaries of these 35 plans who reported poor health were 47 percent were more likely to leave their plans than healthier beneficiaries. The elevated number of sick enrollees leaving MA plans could indicate that these consumers are not receiving adequate care.
“Beneficiaries who left the 35 contracts with health-biased disenrollment tended to report leaving for reasons related to preferred providers and access to care,” said the GAO study. In the additional 91 MA plans studied, members cited their reasons for disenrollment as being related primarily to cost of care.
Medicare Advantage plans are offered by private payers who contract with CMS to provide coverage in place of traditional Medicare benefits. These MA plans have surged in popularity since 2010, with a 60 percent growth rate. Their popularity has also been on the increase due to the nation’s aging baby-boomer population.
Part of the popularity of MA plans comes from their ability to offer enrollees increased financial security by offering caps on annual out-of-pocket expenses. The plans also offer additional benefits not found with traditional Medicare, such as vision or dental coverage.
Currently, over 19 million American seniors and people with disabilities, or close to a third of Medicare beneficiaries in the nation, are enrolled in a MA health insurance plan.
The four most popular types of MA plans include Health Maintenance Organization (HMO) Plans, Preferred provider Organization (PPO) Plans, Private Fee-for-Service (PFFS) Plans, and Special Needs Plans (SNPs).
The 35 plans with high disenrollment rates cited by the GAO study were not named, but primarily consisted of small plans with 15,000 or fewer members. The 35 plans also had received poor ratings on the government's star rating system, which is used to assess the quality of care for MA plans. Of the plans with high disenrollment rates, two dozen saw almost 20 percent of their members leave in 2014. The median average disenrollment rate for a MA plan is 10.6 percent.
The GAO study found that 41 percent of members leaving one of the highlighted plans said their preferred provider or hospital was not covered. This number was significantly higher than 25 percent of healthier enrollees who reported healthcare access as an issue.
An average of 27 percent of sick members also reported more problems with obtaining needed care, information on drugs, and with drug coverage. Only 16 percent of healthy enrollees reported those issues as a reason for leaving an MA plan.
Among the additional 91 MA plans evaluated, the majority of those members left for cost related issues. Forty-five percent of healthy enrollees who reported leaving their MA plan said it was because another plan cost less. Only 27 percent of those sicker members reported that as an issue for leaving.
Currently, CMS does not use the information collected in its Disenrollment Reasons Survey to support oversight of Medicare Advantage plans. Instead, the results are distributed for internal quality improvements among the plans, as well as released to the public on CMS’s Medicare Plan Finder website.
The GAO report recommends that CMS start leveraging the available data to better understand consumer satisfaction and target improvement programs to plans that need extra help.
“Given the data account managers use in their oversight of MA contracts, CMS is unlikely to consistently identify contracts with health-biased disenrollment as needing extra scrutiny,” said the GAO report. “CMS has available data that its account managers could use to monitor contract disenrollment rates by beneficiary health status.”
The GAO recommended that to improve its oversight on MA contracts, CMS examine disenrollment data by health status and the members reported reasons for leaving. The GAO’s advice was reaffirmed by HHS.