• New work on selection into (and out of) Medicare Advantage

    Jordan Rao, for Kaiser Health News:

    study released Thursday, by Gerald Riley, a researcher at the Centers for Medicare & Medicaid Services (CMS), adds to those concerns. The study looked at more than 240,000 people who dropped out of Medicare Advantage plans in 2007, and compared them with beneficiaries who remained in traditional Medicare the entire time. In the six months after leaving the private plans, the former Medicare Advantage patients used an average of $1,021 in medical services each month, while the patients in the control group cost Medicare $710 a month, the study found.

    Another study in the December issue of the journal Health Affairs found that people “disenrolling were much more likely than other beneficiaries to report health declines.” Those researchers, led by J. Michael McWilliams, a Harvard Medical School professor, surmised that beneficiaries who developed serious ailments might leave the plans to get unfettered access to physicians and treatments through traditional Medicare, but neither that study nor Riley’s determined what motivated the changes. […]

    McWilliams’ study, along with other analyses in the same issue of Health Affairs, found that generally, Medicare has succeeded in reducing cherry-picking by Medicare Advantage plans by changes in how the program worked, including restrictions in the time periods that people could switch from a private plan back to traditional Medicare. In 2006, Medicare tried to crack down on switches by limiting them to once a year rather than monthly.

    Rao’s piece goes on to describe other work that suggests better control of costs and health in Medicare Advantage plans. However, one cannot easily disentangle health and utilization management from selection of lower risk enrollees. What helps keep the picture muddy is that researchers do not have access to Medicare Advantage plan data to the same degree as traditional Medicare data. Yet taxpayers pay more per Medicare Advantage enrollee than traditional Medicare enrollee. This should really bother you. It’s your money!

    Notice also how many premium support proposals even consider this data issue. By my count, none.

    @afrakt

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    • I know little about this subject from an expert view. I am only a recent selector of a plan for my wife and myself. The Advantage plans were lower annual fees but higher costs per visit and other events than medicare plus supplemental. Known out of pocket expense for a semi-healthy person, under Advantage, appeared the cost effective solution.

      Although we are quite healthy we chose the apparently more expensive supplemental for the peace of mind of not choosing between health and costs.