A recent study by Health Affairs shows that elderly Americans enrolled in Medicare Advantage plans are more likely to end up at a lower-quality nursing home or assisted living facility, compared to senior citizens with traditional Medicare coverage.
A Medicare Advantage health insurance plan is an increasingly popular alternative to traditional Medicare plans. A Medicare Advantage plan is a health insurance plan that is run by a private health insurance company, and these types of plans “must offer coverage that is comparable to original Medicare parts A and B,” according to U.S. News World & Report. In forgoing the traditional Medicare plan, elderly Americans who choose a Medicare Advantage plan may pay nothing more each month, or they may choose a pricier plan that has better coverage. Like other private health insurance plans, and unlike the pay-for-service system utilized by traditional Medicare plans, there can be deductibles, monthly premiums, and co-pays.
Therefore, also similar to a private health insurance plan, there are some pricier Medicare Advantage plans that offer better coverage, while there are also Medicare Advantage plans that do not. The study by Health Affairs determined a retirement home or assisted living facility was “high quality” or “low quality” by looking at its readmission rate (the lower, the better) and its quality rankings.
When only looking at the pricier Medicare Advantage plans, there is no discrepancy in the quality of care compared to traditional Medicare enrollees. However, when cheap Medicare Advantage plans are included, the results are particularly disastrous for the enrollees. For every 1,000 enrollees in Medicare Advantage Plans, a full 42 senior citizens are likely to end up at a lower-quality facility when compared to a traditional Medicare plan. According to FierceHealthcare, one possible reason is that cheap or low-quality Medicare Advantage plans are not as universally accepted at nursing homes. A full 35 percent of Medicare Advantage enrollees in these types of plans did not have access to more than 30 percent of the physicians in their immediate area.
Unfortunately, it appears these low-quality Medicare Advantage plans end up costing the system much more money, even as they provide lower-quality care to the enrollees. A 2015 study by FierceHealthcare found that patients who chose a long-term nursing home switched to the traditional Medicare fee-for-service plan at a rate of almost six times higher than those who chose the opposite.
The obvious implication being that these low-quality Medicare Advantage plans do a disservice to their seniors while taking their money, only to have them dumped onto the traditional Medicaid system when they become too expensive or have real healthcare needs. Sadly, this finding is borne out by other studies – a Government Accountability Office report released in 2017 found that 35 out of the 126 Medicare Advantage plans it reviewed had high numbers of sick people dropping out – for the most part, citing a difficulty finding a healthcare provider.