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Category: Medicare Advantage

Medicare Advantage chaos is making life more difficult for hospitals, insurers — and seniors

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Janna Herron

Hospitals and insurance giants are clashing over wildly popular Medicare Advantage plans as both sides try to protect their profits. Many seniors enrolled in these plans are caught in the crosshairs.

More hospitals and healthcare providers are terminating agreements with insurers that provide these private-sector alternatives to Medicare, citing too many denials, delays, and refusals to pay for care that government-run health insurance would typically cover. The fracas is deepening this year as the federal government issues new guidance on how the plans can be run, posing a major new threat to a profit engine for some of the country’s largest insurance companies.

“We call these knife fights in the industry and I think we’re seeing more and more,” Whit Mayo, an analyst with Leerink Partners, told Yahoo Finance. “And is this something that these insurers are going, ‘OK, this could become a bigger problem for our bottom line.’”

Seniors also have a lot at stake. If more hospitals ditch these plans, seniors who rely on that coverage will be forced to pay higher costs or may even be kept from seeing the doctor of their choice. Many have little recourse if they face these challenges.

“It stinks,” Mayo said. “You’re putting consumers in the middle of these negotiations and they really value being able to know if they’re facing out-of-network costs if they do see a provider that’s not within their network. So the emotional strain that this takes on the people caught in the middle is the worst.”

‘The deck is heavily stacked in favor of MA enrollment’

This year, 33 million Americans have MA plans, representing just over half of Medicare-eligible individuals, according to research from Chartis. They are offered by giant companies like UnitedHealthcare, which is owned by UnitedHealth Group (UNH), as well as Humana (HUM) and CVS/Aetna (CVS).

These MA plans have only grown in popularity since the program’s inception, with enrollment outpacing that of traditional Medicare in the last six years. Two big allures of these plans are their perks and cost.

MA plans provide benefits traditional Medicare doesn’t offer, such as dental and vision coverage and a grocery allowance. Many also offer a low or $0 monthly premium. That’s cheaper than Medicare’s $174.70 monthly premium and any supplemental coverage seniors who choose Medicare often buy.

“MA plans are very well compensated. With that extra money, MA plans are able to offer services that Medicare doesn’t offer,” David Lipschutz, the associate director for the Center for Medicare Advocacy, told Yahoo Finance. “The deck is heavily stacked in favor of MA enrollment.”

Of course, there’s a tradeoff. Depending on the MA plan, enrollees have to go to a network of providers who have contract agreements with the insurer. If an enrollee goes out of network, they either must pay higher costs for the care or may not be allowed to see that provider at all.

The consequences of that tradeoff came to a head in 2022 as MA insurers began denying more coverage for necessary care just as seniors who had delayed elective procedures flooded back into hospitals that were already struggling with major labor shortages.

The practice has infuriated healthcare providers.

“This practice does cost substantial amounts of time and money, but more importantly, it’s not right for our patients who are often caught in the middle or receive coverage that is different than that offered to patients enrolled in traditional Medicare,” wrote a spokesperson for Louisville, Ky.-based Baptist Health Medical Group, which last year terminated its MA agreement with Humana.

Some hospitals move forward with care without prior authorization because it’s an emergency and the appeals process takes too much time.

“There are patients out there that can’t wait. The delay of a cardiac procedure or cancer procedure could be life-threatening,” said Chris Van Gorder, the president and CEO of San Diego-based Scripps Health.

And when the hospital files a claim, “They deny it saying, ‘We didn’t approve it,’” Van Gorder said.

Many healthcare providers are losing money as a result.

Scripps Health lost $75 million last year from its MA-insured patients, Van Gorder said. Scripps Clinic and Scripps Coastal, the medical groups that have exclusive medical service contracts with Scripps Health, tried to renegotiate with MA insurers to reach acceptable terms, but that ultimately wasn’t successful.

The medical groups then withdrew from their MA HMO agreements with UnitedHealthcare, Anthem Blue Cross, Blue Shield of California, Health Net of California, SCAN Health Plan, UnitedHealthcare of California, and Alignment Health last year.

“The last thing in the world I wanted to do is cancel a contract for 32,000 patients. I’m in the business of delivering healthcare, not canceling healthcare,” Van Gorder said. “We just can’t afford it financially.”

In the last 18 months, more than a dozen other healthcare and hospital systems nationwide have dropped out of MA plan networks, many of them citing denial-of-care issues.

“I think we are sadly the vanguard of what is going to be some pretty confrontational contract negotiations between payers and hospitals in the next few years,” Van Gorder said. “I think this is going to get ugly.”

UnitedHealthcare told Yahoo Finance that “each year, we successfully renegotiate the vast majority of our contracts with providers. Our goal is to be a good steward of the resources available to cover our members’ cost of care by ensuring they are charged fair, sustainable prices for the services they need.”

Humana and Centene did not respond to requests for comment.

Still, the tumult also has gotten the attention of the Centers for Medicare & Medicaid Services, which recently put out new rules on processing prior authorizations, patient risk coding, and other reporting and transparency requirements designed to address some of the medical providers’ concerns.

It also adds more pressure on insurers by making it harder to deny claims, potentially forcing insurers to cut back on the perks their MA plans offer.

“The industry is engulfed in just a historically high level of controversies right now. It’s a very tough environment for the plans,” Mayo said. “And I think we’re going to see a sector that’s going to really pull back on benefits.”

In the meantime, seniors who need healthcare are stuck in the middle.

Seniors can opt for a different MA plan or original Medicare during the Medicare Advantage open enrollment period from Jan. 1 to March 31 — and they have been. Plan swapping was up in January and February, Mayo said, based on monthly data from the CMS.

Still, switching to traditional Medicare is no panacea, either. While seniors will have no problem getting Medicare, they may find it harder to get a Medigap policy, a supplemental policy that covers the 20% of costs that Medicare does not cover for medical care.

When a senior first signs up for Medicare at age 65, Medigap policies — which are provided by many of the insurers that offer MA plans — cannot deny or charge a higher premium based on preexisting conditions.

But insurers can deny or charge more for preexisting conditions when someone wants to switch to traditional Medicare down the road. That’s why seniors may choose another MA plan instead, one that could be dumped later by their medical provider.

“That is a danger each and every year,” Lipschutz said. “People don’t have much recourse if their doctor leaves the network.”

Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on Twitter.

‘It will bankrupt them’: Nurse says you should never enroll in Medicare Advantage plans. Here’s why

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Vladimir Supica

In a recent TikTok video, a nurse has issued a PSA to her viewers, advising against enrolling in Medicare Advantage plans.

The video, posted by Christy (@christyprn) on Nov. 21, has amassed over 128,900 views, sparking a lively debate among commenters about the pros and cons of these private health insurance alternatives.

In the video, Christy recounts encountering a billboard on her way home: “I saw a big billboard that said, ‘Enroll in a Medicare Advantage plan, and you’ll get a free gym membership!’ and it reminded me to give you guys your yearly reminder to not enroll in a Medicare Advantage health insurance plan.”

She explains, “When those Medicare health insurance plans are managed by the government, that is just called Medicare or some of us call it traditional Medicare. However, a while back, the government started allowing private insurance companies to distribute these plans as well. These are called Medicare Advantage plans.”

Christy goes on to express her reservations about these private insurance plans, citing concerns that they may deny crucial healthcare services that traditional Medicare would cover, “A lot of health care workers really don’t like these Medicare Advantage plans because they tend to deny a lot of really important care that traditional Medicare would have covered,” she claims.

However, while emphasizing the need for careful consideration, the TikToker gives out a disclaimer: “There may be some instances where a Medicare Advantage Plan offers some additional benefit that might be more beneficial to a patient than traditional Medicare.”

Since it was posted, the video has sparked a lively debate in the comments section, with healthcare workers and viewers sharing their experiences and opinions.

Some echoed Christy’s concerns, with one commenter saying, “I work in outpatient care, and the Medicare advantage plans are the worst. We can’t get anything covered.”

“Thank you, say it louder. Advantage plan are thieves,” a second added.

“RN here. Amen sister. It will bankrupt them,” a third wrote.

However, others disagreed, recounting their positive experiences with their plans.

“My father was on different Medicare Advantage plans here in NC. They worked out great for him. No extra monthly cost and more docs to choose from,” one such commenter wrote.

“Medicare Advantage has worked great [for] me. My Dr’s med group totally has their act together,” a second claimed.

“No doctors in my area accept regular Medicare. I can only use it at urgent care clinics,” a third commenter remarked.

The Daily Dot has reached out to Christy via TikTok comment.

For a true Medicare supplement/Medigap, contact [www.azhealth.us](www.azhealth.us).

The big decision: Should I stay with original Medicare or choose a Medicare Advantage plan? Here’s why one expert says 1 of those options is the clear worse choice for seniors

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As you approach age 65, you’ll have some decisions to make about medical coverage. On one hand, you can enroll in Medicare. But you may be tempted to choose another option instead: a Medicare Advantage (MA) plan instead. If you’ve seen the advertisements for MA plans, you might think they’re more cost-effective and comprehensive than Medicare. But according to Keith Armbrecht, Founder of Medicare education company, Medicare on Video, that’s not necessarily true.

“I would never choose a Medicare advantage plan,” he says in a YouTube video entitled “Why Medicare Advantage Is The Worst Choice For Seniors.”

Here’s why he’s not a fan of these plans.

What is a Medicare Advantage plan?

Medicare Advantage plans are alternative insurance plans to Medicare, and they’re offered by Medicare-approved private companies. These plans are sometimes called “Part C” or “MA,” and they include Medicare Part A (hospital insurance) and Part B (medical insurance).

Those interested in MA have more than 40 different plans to choose from. The main
reasons to explore them include:

That being said, there are a few downsides to Medicare Advantage plans. Here are some important things to consider before locking into an MA plan.

Limited choice

If you opt for an MA plan, your choice of doctors can be limited and you’re likely to face obstacles in getting approved for procedures or seeing specialists. “The primary reason I would absolutely choose original Medicare and would never choose Medicare Advantage is because I want control over what I do,” says Armbrecht. With an MA plan, he warns, you can face wait times of “weeks, even months,” to get referrals or have procedures authorized.

You’re typically limited to doctors in the plan network and service area, as well,
according to the government’s Medicare website.

Deceptive marketing

The Medicare Advantage plan industry has a history of deceptive practices. In 2022, the Majority Staff of the U.S. Senate Committee on Finance found that Medicare beneficiaries were being inundated with aggressive marketing tactics, false and misleading information and overall predatory marketing from MA providers. According to the report, deceptive Medicare Advantage marketing practices are, “widespread, not isolated events.”

According to a 2022 review from the New York Times, four out of five of the largest MA providers (UnitedHealth, Humana, Elevance and Kaiser) have faced federal lawsuits for fraud and at least eight providers overbilled, according to the U.S. Department of Health and Human Services Office of the Inspector General.

Denied claims

Multiple studies have shown MA plans have a pattern of denying claims that should be covered.

A 2022 review from the Inspector General’s office found that MAs denied 13% of prior authorization requests that met Medicare coverage rules. Essentially, these claims would have been approved under original Medicare. The most commonly denied requests were imaging services, stays in post-acute facilities and injections.

Go to the source

“Medicare is probably the only government program that does exactly what it’s supposed to do and does it very well,” says Armbrecht. In other words, original Medicare is likely your best choice. If you’re nearing 65 and considering your options, you can visit Medicare.Gov for accurate and up-to-date information so you can make the right decision for your health insurance needs.

9 Surprising Disadvantages to Medicare Advantage Very Few People Know

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Once you reach age 65, you become eligible for Medicare, the federal government’s health insurance program primarily geared toward seniors and retirees. Whether you retire early or plan to work for several more years, have already turned 65, or are still a few birthdays away, it’s worth thinking about which Medicare plan you’ll sign up for when the time comes.

Medicare Advantage, or Medicare Part C, is one Medicare plan option — but is it the best choice for you, or should you stick with Original Medicare? Here we’ll cover nine major reasons Medicare Advantage could conflict with your retirement goals.

1. It has a much smaller healthcare provider network

Most — though not all — American healthcare providers accept Original Medicare insurance. The same can’t be said for Medicare Advantage, which has a much smaller provider network.

If you’re trying to maintain your current doctor then it could eliminate a lot of money stress if you make sure they are in the network before going for a visit. If finding a provider you love is important to you, Original Medicare will give you more options. With Medicare Advantage, you’ll have to settle for the best care you can find within the network.

2. Its service area is much smaller

Since Medicare is administered by the federal government, you can use it at any hospital or medical provider in the United States (as long as that provider accepts Medicare, which most do).

In contrast, Medicare Advantage’s smaller provider network is also extremely localized. Whenever you’re seeking non-emergency care, you’re limited to providers in your immediate area.

3. Its provider network is especially small for rural communities

No matter where in the country you live, Medicare Advantage’s network is smaller than Original Medicare’s network, but the network is especially limited for rural communities. According to one study published in 2021, 10.5% of rural retirees who sign up for Medicare Advantage end up switching to Original Medicare.

By way of comparison, only 5% of non-rural retirees switch away from Medicare Advantage.

4. It usually requires referrals to see specialists

With Original Medicare, you can schedule a specialist visit even without a referral. With Medicare Advantage, though, you can’t simply call a specialist and schedule an appointment. Instead, you need a referral from a primary healthcare provider before you can speak with a specialist.

Pro tip: You may need to make some extra money if you have a health condition that requires frequent trips to a specialist.

5. It requires preauthorization for most high-cost services

If you’re enrolled in Medicare Advantage, you’ll likely end up paying for some of the most expensive healthcare services out of pocket unless you get the expense pre-approved.

Those services include inpatient hospital stays, partial hospitalizations, physical therapy, dialysis, hearing exams, psychiatric services, and much more.

If you don’t get the expense approved in advance, you’ll likely end up paying for it out of pocket. For the most part, Original Medicare doesn’t require preauthorization.

6. It often requires preauthorization for Part B medications

Medicare Part B is the medical insurance section of Medicare, and it’s included in all Medicare Advantage plans.

However, you’ll need prior approval before your Medicare Advantage plan will help pay for any outpatient drugs prescribed under Part B (rather than Part D, which covers most
other prescriptions).

Most Part B drugs that require preauthorization are injectable, including injectable medications for osteoporosis, injectable blood-clotting factors for hemophilia, and some oral and injectable end-stage renal disease medications.

7. It can require step therapy for Part B drugs

Step therapy refers to the practice of using a cheaper medication to treat a condition before moving to a more expensive medication.

Unlike Original Medicare, Medicare Advantage plans can require step therapy for Part B medications, meaning your Medicare Advantage plan can refuse to cover medication prescribed by your doctor if there’s a cheaper alternative.

8. It might make hospital stays more expensive

Medicare Advantage might be cheaper for some retirees, especially those who mainly see healthcare providers for preventative health.

But if you end up in the hospital for a week, studies show that 50% of seniors using Medicare Advantage will pay more for that stay than seniors using Original Medicare.

In other words, if you have poor health and know you’re at a higher risk of hospitalization, Medicare Advantage might cost you more over time than Original Medicare.

9. It can make budgeting for healthcare even harder
Since you can’t always anticipate your health needs in advance, budgeting for healthcare is notoriously tricky. If you’re living on a fixed income, though, you need to carefully track your expenses to make sure you don’t overspend.

Original Medicare makes healthcare expenses easier to anticipate by charging you a recurring monthly premium. As a result, you can then visit a healthcare provider at a lower cost and without rearranging your budget to accommodate the additional expense.

In contrast, most Medicare Advantage plans don’t have a monthly premium. Instead, you pay for medical expenses out of pocket until you hit your out-of-pocket max, which makes it hard to know how much you could be spending on healthcare in a given month.

Bottom line

Medicare Advantage plans can offer crucial benefits that make life easier for some retirees, especially those in good health with relatively few healthcare needs.

But it’s definitely not the right choice for everyone. You should weigh the pros and cons with your situation before making a final decision.

If you anticipate hospital stays, prefer to pick your own provider, and dislike the idea of getting prior approval for most expenses, Original Medicare might be a better choice for you to prevent the need to make extra money for insurance.

Retirees may face this hassle with Medicare Advantage

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Seniors who opted for private Medicare insurance plans should not be shy about pushing back on denials for pre-authorizations, according to a new study.

Of the 35 million requests by Medicare Advantage enrollees seeking prior authorization for healthcare services or medications in 2021, two million of those requests were fully or partially denied, according to a new analysis from the Kaiser Family Foundation (KFF), a nonprofit organization.

The results raise flags that the approval process may create unnecessary obstacles for patients to receive medical care and underscored that seniors may want to spend more time shopping around for these popular plans to avoid these hassles.

“The high frequency of favorable outcomes upon appeal raises questions about whether a larger share of initial determinations should have been approved,” Jeannie Fuglesten Biniek, KFF’s associate director, program on Medicare Policy, and Nolan Sroczynski, a KFF data analyst, wrote.

“It could reflect initial requests that failed to provide necessary documentation. In either case, medical care that was ordered by a healthcare provider and ultimately deemed necessary was potentially delayed because of the additional step of appealing the initial prior authorization decision, which may have negative effects on beneficiaries’ health,” the authors concluded.

Don’t Take No for an Answer

The pre-authorization hoop primarily impacts people enrolled in Medicare Advantage plans, a privatized, managed-care version of the traditional Medicare program.

In 2022, virtually all Medicare Advantage enrollees (99%) were enrolled in a plan that required prior authorization for some services. Most commonly, higher-cost services, such as chemotherapy or skilled nursing facility stays, require prior authorization, according to KFF’s study, which reviewed data from 515 Medicare Advantage contracts representing 23 million Medicare Advantage enrollees.

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