Illustration: Lindsey Bailey/Axios
The government spent 27% more, on average, on people who transferred from Medicare Advantage plans to traditional Medicare than on those who were continuously covered under the traditional plan, a KFF study found.
Why it matters: The findings raise questions about how much certain groups of beneficiaries who disenroll from MA — including dual-eligibles and those with higher health needs — are adding strain to the program's finances.
What they found: Medicare spent an average of $2,585 more on individuals who left MA in 2022 than on people who were continuously in traditional Medicare in the year following disenrollment.
- Differences varied by health condition, from 15% for people with pneumonia to 34% for people with diabetes. For cancer patients, the difference was 28%, or $4,907, higher on average.
- People dually eligible for Medicare and Medicaid who disenrolled from MA had spending that was 61%, or $9,435, higher than their counterparts who were continuously in traditional Medicare.
The intrigue: The study didn't pinpoint a single cause, but it noted evidence that people who use relatively more health care services are less likely to choose a private plan and more likely to opt for traditional Medicare.
- That may stem from concerns about the tools MA plans typically use to manage utilization and costs, including prior authorization requirements and restrictions on out-of-network providers.
- Remember, the prior authorization bill we've covered extensively in this Congress would require MA plans to streamline approval of some routine treatments for seniors.
The bottom line: Although Medicare Advantage remains popular with seniors, the findings show it may not be a good fit with certain groups of patients.
- One question, KFF said, is what share of Medicare Advantage enrollees want to switch to traditional Medicare but feel they can't because of the cost of Medigap supplemental insurance or concerns about potentially high out-of-pocket costs.
