MANAGED CARE March 2013. ©MediMedia USA

News & Commentary

Medicare Advantage Loses Sicker Enrollees

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Critics of Medicare Advantage (MA) who have long voiced concern that the program lends itself too easily to cherry-picking have new ammunition.

Many beneficiaries who leave MA plans for traditional Medicare turn out to have significant health problems that they possibly believe might be better addressed in the fee-for-service (FFS) program, according to a study by the Centers for Medicare & Medicaid Services.

“Disenrollment of high-cost individuals may be related to persistent lower levels of satisfaction among sicker MA enrollees,” states the study “Impact of Continued Biased Disenrollment From the Medicare Advantage Program to Fee-for-Service” (http://tinyurl.com/Medicare-disenroll).

There were about 7 million people in MA plans in 2007 (now there are about 13 million), and the study focuses on 240,000 who dropped out in selected counties.

The health costs they incurred in the six months after transferring to FFS Medicare are compared to the costs of about 552,000 “stayers” in the same time period in the same geographical area. The disenrolled used about $1,000 a month; the controls used $700.

“Despite substantial changes in policies and market characteristics of the Medicare managed care program, disenrollment to [FFS Medicare] continues to occur disproportionately among high-cost beneficiaries.”

The study adds that selective disenrollment “potentially increases Medicare costs through the return of high-cost beneficiaries to the FFS sector, leaving behind a healthier and lower-cost population in the capitated MA sector.”

Interestingly, people who left preferred-provider organizations (PPOs) and private fee-for-service plans did not ring up as much health care costs as those who left (HMOs).