The research raises questions whether Medicare Advantage plans are the solution to controlling spending on the patients who account for most healthcare costs.
Seniors bolt from money-saving Medicare Advantage plans to traditional Medicare once they face major illnesses that require long-term care, according to research from a team at Brown University.
The study, reported this week in Health Affairs, found that 17% of Medicare Advantage patients who entered nursing homes changed to traditional Medicare at the next open enrollment. Only 3% of these patients moved into a Medicare Advantage plan once they needed long-term care.
Researchers reported similar findings for patients needing short-term nursing home stays or home health care. Among those seeking short-term stays, 9% left Medicare Advantage, compared with 4% who left traditional Medicare. For those seeking home health care, the figures were 8% leaving Medicare Advantage and 3% switching out of traditional Medicare.
The findings raise questions whether Medicare Advantage is truly a solution to constrain healthcare spending, since most of the costs accrue from a small share of very ill patients, often at the end of life. If traditional Medicare remains an option, and patients flock there once they start consuming higher levels of care, it will be difficult to control spending.
Medicare Advantage (MA) plans do not force people to leave, but plan design can give patients cause to switch, especially through cost-sharing. Once a patient faces a nursing home stay, and cost-sharing levels are revealed, patients make a rational choice to go back to traditional Medicare. Problems also arise if a particular specialist the patient wants to use is not included in the MA plan network.
CMS is trying to reduce this phenomenon by pressing healthcare systems, hospitals, and providers to pursue alternate, value-based payment models. Earlier this year, HHS Secretary Sylvia Mathews Burwell set goals for 30% of Medicare reimbursements to be based on value-based models, with that share rising to 50% in 2018.
Rahman M. Keohane L, Trivedi AN, Mor V. High-cost patients had substantial rates of leaving Medicare Advantage and joining traditional Medicare. Health Aff 2015;34(10):1675-1681.