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Medicare Advantage Disenrollees

By February 7, 2013Commentary

Medicare Advantage plans have always been accused of selectively enrolling healthy beneficiaries and of encouraging disenrollment of sicker ones.  Medicare has made several changes to the payment formula and to when beneficiaries can disenroll to try to limit these practices by plans or by beneficiaries.  A recent CMS Office of the Actuary study looks at spending associated with patients who disenroll from MA plans.   (CMS Actuary Report)  The data used is quite old, going back to 2007, which raises questions in itself.  Surely more recent data is available and would be far more useful to policymakers since there have been a number of changes in the MA program over the last five years.  In any event, the researchers compared the actual spending for disenrollees with that which would be expected for a person with their health characteristics and found that the disenrollees incurred spending significantly above that which was expected.  This finding, however, is most likely just consistent with the fact that once they are out of Medicare Advantage, with its closer attention to care, these people are free to incur all kinds of care that an MA plan might have deterred.

The research also relies on dated findings for some of its assumptions, for example that beneficiaries are less satisfied with Medicare Advantage plans that Medicare FFS, on an adjusted basis.  The authors also seems to think that beneficiaries would disenroll from Medicare Advantage for cost reasons, when in fact most MA plans have richer benefits than traditional Medicare.  The most likely reason for disenrollment for a beneficiary who has significant illness is dissatisfaction with the limits which managed care places on beneficiaries roving around to multiple providers and seeking care which may not be necessary or beneficial.  So perhaps the most important thing that could be done to deal with this problem, if it is one, is to ensure that beneficiaries understand and agree to the limits on their care that are inherent in a managed care environment.  And perhaps a more useful analysis would be to examine the patterns of care for disenrollees and for persons staying in Medicare Advantage who have the same diseases and health status.  We suspect that would show likely excessive care delivery to Medicare beneficiaries by providers.

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