KFF Finds Spending Higher When MA Enrollees Return To Traditional Medicare
A new analysis from Kaiser Family Foundation (KFF) finds higher Medicare spending among those who switch from Medicare Advantage (MA) to traditional Medicare as compared with similar beneficiaries who were in traditional Medicare all along.
KFF says Medicare spent an average of 27% more on those switching in, after adjusting for differences in health status and other characteristics. This amounts to a difference of $2,585 in Medicare spending per person, on average, between the two groups in 2022.
The difference in spending among people with certain health conditions varied from 15% for those with pneumonia to 34% for people with diabetes.
The causes for the higher spending are as follows: skilled nursing facility spending (34%), outpatient hospital spending (23%), and inpatient hospital spending (20%).
Differences in spending were greater for people of color and dual eligibles and increased with age.
KFF asks several questions on the reasons why spending is higher:
- Were switchers unable to get the medical care they felt they needed while enrolled in MA?
- Would more MA enrollees make the switch if people with pre-existing conditions did not face barriers to purchasing Medicare supplemental insurance?
- Do the disenrollments reduce costs and increase profits for MA plans?
- Does the current MA payment system adequately account for adverse selection into traditional Medicare?
KFF notes that previous KFF and MedPAC, the congressional policy arm, analyses found that people who enroll in MA have lower Medicare spending in the years before they enroll than similar people who remain in traditional Medicare, even after controlling for health status.
I don’t discount that some of the increased costs could come from higher needs of individuals and the potential to receive the care they think they need. But I would also argue that KFF has not covered the fact that MA is more efficient and seems to assume that all the increased spending is in the traditional program is absolutely justified.
Utilization management in MA is not a bad thing. As an example, the highest increased cost area is skilled nursing facility (SNF) care post acute stays. But there is every reason to believe that providers in traditional Medicare are doling out orders for SNF stays without really determining if lower costs of care could serve members just as well. The same holds true for even more expensive inpatient stays.
MA plans’ rate of inpatient (IP) stays and SNF stays has been markedly less. With a 2024 prior authorization change, MA IP and SNF stay costs will likely increase over time as the Centers for Medicare and Medicaid Services (CMS) have told MA plans to abide by the traditional program rules.
In essence, they took the managed care out of managed care. While KFF is largley balanced, it shows some of its anti-MA and big healthcare bias here. This is sure to be used on Capitol Hill and the industry has to be ready to push back.
#kff #medicareadvantage #medicare #priorauthorization #coverage
Democrats Counter GOP Stop Gap Healthcare Measures
Congressional Democrats offered a counter to Republicans’ lame-duck healthcare proposal. Democrats would include a two-year extension of Medicare telehealth flexibilities versus Republican’s three-year extension. Democrats would give a small boost to community health center funding. They also would endorse prior authorization reforms in Medicare Advantage (MA) and have a similar approach to the GOP on a physician payment patch. Pharmacy benefit manager (PBM) reforms would occur. Democrats would not repeal nurse staffing mandate in nursing homes.
Democrats also are urging a one-year extension of the enhanced premium subsidies in the Exchanges. A revised Congressional Budget Office (CBO) report on sunsetting the enhanced subsidies finds the following:
- The number of uninsured will rise by 2.2 million in 2026, by 3.7 million in 2027, and by 3.8 million, on average, in each year over the 2026-2034 period.
- Gross benchmark premiums will rise by 4.3 percent in 2026 if the subsidies expire, rising by an average of 7.9 percent between 2026 and 2034.
The CBO has said making the enhancements permanent would cost $335 billion over 10 years.
Additional article: https://insidehealthpolicy.com/daily-news/dems-make-push-one-year-aptc-extension and https://thehill.com/policy/healthcare/5026478-affordable-care-act-subsidies-expiration-health-coverage/
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#crs #governmentshutdown #congress #aca #obamacare #exchanges
Trump To Undo Biden Regulations
One way Donald Trump is looking at reducing spending is to rescind regulations and that could include healthcare. The president with a GOP Congress will have far-reaching ability to rescind Biden actions, including the following:
- Using the far-reaching Congressional Review Act (CRA). At the president’s request, the Congress could use a short window to overturn final rules.
- Trump could propose and finalize a rule that rescinds old regulations.
- Trump could push through rules that delay the implementation of some rules.
- Trump could refuse to finalize or amend proposed rules.
- Republicans could also attach appropriation riders that prohibit an agency from spending money to implement a rule.
In other news, S&P Global Ratings said healthcare providers could face a net negative impact, which could impact certain healthcare ratings. It said near-term effects will be limited.
Additional article: https://www.modernhealthcare.com/finance/provider-finances-trump-administration-policies-sp-global-fitch
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#regulations #trump #congress #biden
Seniors Face Greater Affordability Issues Than In Other Nations
Older Americans are more likely to struggle with affordability of healthcare than those in other developed nations, according to researchers at the Commonwealth Fund and a recent survey.
The survey also compared people enrolled in traditional Medicare to those in Medicare Advantage.
The survey found that out-of-pocket (OOP) spending in the U.S. is high. About 1 in 4 in the U.S. had at least $2,000 in OOP costs last year. By comparison, less than 5% of those living in France or the Netherlands said the same. American seniors also had the highest rate of delaying or forgoing care due to the cost.
Meanwhile, Gallup’s annual Health and Healthcare poll finds that the vast majority of people in the U.S. are dissatisfied with the cost of healthcare. And the percentage of those who would rate the quality of U.S. healthcare as excellent or good has hit its lowest point in more than two decades.
Additional article: https://www.modernhealthcare.com/safety-quality/gallup-polls-health-healthcare-costs-satisfaction-2024 and https://thehill.com/policy/healthcare/5026200-health-care-quality-rating-24-year-low-gallup/
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#medicare #medicareadvantage #coverage #healthcare
Post Killing, Insurers Face Wrath And Security Concerns
Post the targeted killing of United Healthcare CEO Brian Thompson, major insurers are facing a social media backlash on social media related to denials and high costs. In addition, insurers are busy pulling back on information available to the public on their senior leaders.
Additional article: https://www.healthcaredive.com/news/health-insurers-remove-executive-bios-images-unitedhealthcare-ceo-killing/734824/
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#unitedhealthcare #healthcare #priorauthorization #claimsdenials #costs
https://www.modernhealthcare.com/insurance/brian-thompson-shooting-unitedhealthcare-social-media
Kaiser Health News Analyzes Georgia Work Requirements
Kaiser Health News (KHN) finds that processing times have worsened since July 2023, when Georgia launched the nation’s only active Medicaid work requirement program. KHN also found the program to be administratively expensive.
#medicaid #workrequirements #healthcare #coverage
https://kffhealthnews.org/news/article/georgia-work-requirement-medicaid-food-stamps/
— Marc S. Ryan
