How Medicare Advantage Enrollment Has Grown, Diversified in 10 Years

Medicare Advantage enrollment has grown in the last decade largely due to an influx of Black, Hispanic, and low-income beneficiaries, a research letter published in the JAMA Health Forum found.

Before 2011, Medicare Advantage health plans absorbed a greater share of Medicare enrollment because traditional Medicare enrollees were transitioning to Medicare Advantage plans. From 2011 to 2019, Medicare Advantage enrollment continued to increase but the source changed.

The researchers used the Master Beneficiary Summary File from 2011 to 2019 to inform their study of the source of Medicare Advantage enrollment during that timeframe. These files provided over 524.4 million person-years.

Medicare Advantage still drew enrollees from traditional Medicare from 2012 to 2019, with the share of those who came from Medicare Advantage growing from 65.9 percent to 71.1 percent.

The number of enrollees that were new to Medicare who chose Medicare Advantage coverage also grew. A little over 18 percent of enrollees who did not have Medicare coverage previously transitioned into Medicare Advantage in 2012. But by 2019, that share had swelled to 24.7 percent.

Beneficiaries who switched to Medicare Advantage from traditional Medicare tended to be older. Fewer of them identified as Hispanic individuals but more of them identified as Black individuals. Additionally, they were more likely to be dually eligible and more likely to have a disability. Finally, they were more likely to die within two years of enrolling in Medicare Advantage.

“Our study is limited in that it was not designed to examine these mechanisms,” the researchers acknowledged. “As MA continues to grow, understanding the reasons for switching from TM to MA will become more important.”

Although the study did not explicitly explore the causes behind these enrollment shifts, the researchers cited three factors that might contribute to the growth and diversity of the Medicare Advantage population.

First, they noted that Medicare Advantage plans offer supplemental benefits and dental and vision coverage, which traditional Medicare does not cover. 

In 2022, more Medicare Advantage plans offered more supplemental benefits, including special supplemental benefits for the chronically ill (SSBCI), expanded supplemental benefits, and traditional supplemental benefits, according to a Better Medicare Alliance brief.

Second, Medicare Advantage plans offer lower out-of-pocket healthcare spending compared to traditional Medicare. 

On average, Medicare Advantage beneficiaries spend nearly $2,000 less than traditional Medicare beneficiaries in out-of-pocket healthcare spending and premium costs, according to Better Medicare Alliance’s 2022 State of Medicare Advantage report. 

Finally, Medicare Advantage might be more attractive due to the lower premiums.

In 2022, costs were particularly low since Medicare Advantage premiums dropped to the lowest level in 15 years, 10 percent lower than in 2021, the Better Medicare Alliance report shared.

The results corroborate separate studies that show that the Medicare Advantage population is growing and becoming more diverse.

In more than 100 congressional districts, Medicare Advantage coverage represents half or more of enrollment, according to Better Medicare Alliance research. Medicare Advantage coverage is particularly strong in Alabama, Michigan, and Florida.

As the Medicare Advantage population grows, it has also diversified, according to data from the Alliance of Community Health Plans (ACHP)

Medicare Advantage plans grew 60 percent from 2013 to 2020. By 2020, Medicare Advantage plans served 25 million seniors, of which six out of ten were women. Also, more than half of all Hispanic American seniors (52 percent), 49 percent of African American seniors, and 35 percent of Asian Americans selected Medicare Advantage plans for their coverage.

Biden Administration Releases Final Surprise Billing Rules

 The Biden Administration has released final surprise billing rules implementing the No Surprises Act, a federal law enacted in January 2021 that protects patients from out-of-network medical bills when they seek care at in-network facilities.

The new surprise billing rules detail the process for payers and providers to settle on payment for those out-of-network services. Previously, payers and providers would submit payment rates to an independent arbiter, selected by the government. The arbiter would choose the rate closest to the area’s median in-network payment for the services, otherwise known as the qualifying payment amount (QPA), while considering other factors, such as provider training and experience, the provider’s market share, and how difficult it was to provide the service, after the fact.

Provider groups have criticized the use of the QPA as the primary factor in an arbiter’s decision, arguing that the added weight to the QPA amount favors payers over providers.

Notably, the Texas Medical Association challenged the surprise billing arbitration process over the QPA issue and won. A district court vacated the requirement that arbiters select payment offers closest to the QPA unless the additional information warrants a closer review.

The American Hospital Association (AHA) and the American Medical Association (AMA) have also filed a lawsuit challenging the interim final rule implementing the dispute process, arguing that lawmakers did not intend for rules implementing the No Surprises Act to place that much emphasis on the QPA. The lawsuit is ongoing.

In light of the district court’s decision, the latest final surprise billing rules roll back the “rebuttable presumption” that favors the QPA. The rules state that arbiters are to consider the QPA “and then must consider all additional information submitted by a party to determine which offer best reflects the appropriate out-of-network rate.”

The final rules specify that arbiters “should select the offer that best represents the value of the item or service under dispute after considering the QPA and all permissible information submitted by the parties.”

The final rules also cover situations where payers have “downcoded” a claim. According to previous rulemaking, downcoding occurs when payers change service codes or change, add, or remove a modifier, which can lower the QPA for the service code or modifier billed by a provider.

The rules will create new requirements related to what information payers must share with providers when downcoding occurs. The information includes a statement that the service code or modifier was downcoded, an explanation of why the claim was downcoded, and the amount that would have been the QPA had the service code or modifier not been downcoded.

The Biden Administration—through the Departments of Labor, Health and Human Services, and Treasury, which officially released the final surprise billing rules—said that the rules “will help providers, facilities and air ambulance providers engage in more meaningful open negotiations with plans and issuers and will help inform the offers they submit to certified independent entities to resolve claim disputes.”

But whether the updated language is enough to tip the balance for providers remains to be seen. AHA said in a news release late last week that it is closely reviewing the final surprise billing rules.

New York judge dismisses surgeon’s lawsuit challenging surprise billing law

A New York federal judge on Wednesday dismissed a surgeon’s legal challenge that sought to roll back key pieces of a federal law that protects patients from surprise out-of-network bills.

Judge Ann Donnelly ruled against the surgeon, finding that the law is constitutional, and dismissed the case for lack of standing and dismissed the surgeon’s request for a preliminary injunction.

Katie Keith, a lawyer and health policy expert at Georgetown University who tracks surprise billing litigation, called the ruling good news for consumers.

The lawsuit threatened to once again expose millions of patients to surprise out-of-network bills, Keith previously said in a Health Affairs report on the litigation.

Daniel Haller, a surgeon, and his private practice filed suit in December against federal regulators alleging that the ban on surprise billing was unconstitutional along with the independent dispute resolution process, the way in which providers and payers are supposed to resolve payment disagreements.

Haller said the law deprives physicians the right to be paid a reasonable value for their services, according to the complaint.

Under the law, physicians and insurers can enter into an independent dispute resolution process to come to an agreement on the payment for services. The process was intended to keep patients out of the middle of these payment disputes.

Haller argued the process favored insurers — not providers.

However, a key part of that process was struck down by a Texas judge, who ruled in favor of providers in February.

Donnelly said Haller and his team did not show that they even went through the arbitration, or IDR, process, “much less that the IDR process resulted in a payment amount below the reasonable value,” according to Wednesday’s opinion.

“At the time of oral argument — almost six months after the Act went into effect — the plaintiffs could not say whether they had participated in the IDR process. They do not allege that the IDR process has caused any concrete harm, so their claims of constitutional injury are speculative,” Donnelly said.

Haller’s practice, Long Island Surgical, and its team of six physicians perform procedures on patients who are admitted after an emergency department visit.

Almost 80% of Long Island Surgical’s patients have an insurance plan that does not have a contractual relationship with the surgical group. In other words, Haller and his colleagues are almost always out-of-network, potentially putting patients at risk of a surprise medical bill.

The No Surprises Act tried to solve this problem, and it bans surprise billing in most cases.

The law aimed to tackle one of the most frustrating issues in healthcare, which could ensnare even savvy patients. Patients could be unknowingly treated by out-of-network providers, and then get bills their insurers refused to pay in full or part, leaving them stuck to pay the remaining balance.

National uninsured rate hit record low this year

The national uninsured rate reached an all-time low of 8 percent in the first quarter of 2022, according to an HHS report released Aug. 2. 

The report analyzed data from the National Health Interview Survey and the American Community Survey, according to an Aug. 2 HHS news release. 

Three things to know:

1. The previous record low uninsured rate was 9 percent, set in 2016. 

2. The uninsured rate among adults ages 18-64 was 11.8 percent in the first quarter of 2022. The uninsured rate for children ages 0-17 was 3.7 percent. 

3. About 5.2 million people have gained health coverage since 2020. Gains in coverage are concurrent with the implementation of the American Rescue Plan’s enhanced ACA Marketplace subsidies, the continuous enrollment provision in Medicaid, several state Medicaid expansions and enrollment outreach efforts.  

Critics say Mark Cuban’s pharmacy isn’t tackling the big issue: brand-name drugs

Mark Cuban’s pharmacy, Cost Plus Drug Co., has hundreds of drugs marked at discounted prices, but some pharmacy experts say there’s a larger problem that needs fixing, CNBC reported July 28. 

The online pharmacy launched in January with about 100 drugs, and by its one-year anniversary, plans to have more than 1,500 medications, according to the company’s website. The business model, which allocates for a $3 pharmacy dispensing fee, $5 shipping fee and a 15 percent profit margin with each order, aims to uproot the pharmaceutical industry, which has faced criticism for years about its opaque business practices

Gabriel Levitt, the president of PharmacyChecker, a company that monitors the cheapest drug prices, told CNBC there’s more to be done.

“As much as I support the venture, what they’re doing does not address the big elephant in the room,” Mr. Levitt said. “It’s really brand-name drugs that are increasing in price every year and forcing millions of Americans to cut back on medications or not take them at all.”

Brand-name drugs are 80 percent to 85 percent more expensive than generics since brand-name drugs have to repeat clinical tests to prove efficacy, according to the FDA. Cost Plus Drug Co. only offers generics. Mr. Cuban told CNBC he hopes to sell brand-name medications “within six months,” but added that it’s a tentative timeline.

Democrats reach deal on healthcare and climate bill

https://mailchi.mp/ff342c47fa9e/the-weekly-gist-july-22-13699925?e=d1e747d2d8

Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) surprised everyone Wednesday night by announcing they reached a deal on a legislation package called the Inflation Reduction Act of 2022. The deal is a revival of portions of President Biden’s “Build Back Better” plan, more narrowly scoped to meet the demands of Sen. Manchin.

On the healthcare front, the bill would allow Medicare to negotiate prices for certain prescription drugs starting in 2026, and limit seniors’ annual out-of-pocket spending on Part D prescriptions to $2,000. It also includes $64B to extend the enhanced tax credits for Affordable Care Act exchange plans through 2025, avoiding health plan rate increases for millions of Americans. 

The Gist: While several Senate Democrats have announced support for the legislation, the party can’t afford any holdouts given its razor-thin majority. If all Democrats get on board, this legislation will fulfill the party’s longtime promise to lower prescription drug prices. But it stops well short of other major healthcare measures being discussed last year, including expanding Medicare coverage to include dental, vision, and hearing coverage, and closing the so-called Medicaid coverage gap. 

Insurers raise Affordable Care Act (ACA) plan premiums next year

https://mailchi.mp/efa24453feeb/the-weekly-gist-july-22-2022?e=d1e747d2d8

After a few years of relatively unchanged monthly premiums, a Kaiser Family Foundation analysis of 72 rate filings for 2023 finds a median 10 percent increase. Insurers say the biggest driver is rising medical costs, driven by higher rates for provider services and pharmaceuticals, as well as a return to pre-pandemic utilization levels. Insurers aren’t expecting COVID-19 or federal policy changes—including a potential extension of enhanced subsidies—to have much of an impact on rates. 

The Gist: High inflation and the growing wage-price spiral have left providers with much higher costs, which is sure to drive up the overall cost of healthcare. Where provider systems have the leverage to demand higher rates from insurers, this will inevitably drive up premiums—an effect that is already starting to show up in the individual insurance market.

If Congressional Democrats are able to extend ACA subsidies, most ACA enrollees won’t actually feel these premium increases, but as contracts in the group market come up for renewal, we’d expect inflation in employer-sponsored premiums as well. Given the cost-sharing now built into most benefit plans, individual consumers will likely see healthcare join gas, food, and housing as household costs that are experiencing unsustainable inflationary increases.

Finances of older Americans being dinged by high health costs, survey finds

https://www.healthcaredive.com/news/finances-older-americans-being-dinged-high-health-costs-survey-finds/625545/

Dive Brief:

  • Healthcare costs are becoming an increasing source of stress for older Americans, leading to some paring back on treatment, medicines or other spending on food and utilities — or skipping them altogether — to cover medical costs, according to new research conducted by Gallup in partnership with West Health.
  • The survey of U.S. adults released Wednesday found that almost half of adults aged 50 to 64 and more than a third of adults 65 and older are concerned they won’t be able to pay for needed healthcare services in the next year. That’s nearly 50 million older Americans.
  • About 80 million adults above age 50 see healthcare costs as a financial burden. Becoming eligible for Medicare seems to assuage those worries slightly, however: 24% of adults aged 50 to 64, who are not yet eligible for the federal health insurance, said health costs were a major burden. That percentage fell to 15% for those aged 65 and above.

Dive Insight:

The West Health-Gallup survey, conducted in September and October of 2021, is the latest vignette of how exorbitant healthcare costs in the U.S. are increasingly impacting the financial stability of Americans, especially those of retirement age who are more likely to have expensive medical needs.

Out-of-pocket healthcare expenses for adults aged 65 and older increased 41% from 2009 to 2019, according to HHS data. That population spends on average almost double their total expenditures on healthcare costs compared with the general population, despite Medicare coverage.

That cost problem is only likely to worsen amid surging inflation raising the cost of groceries, gas and other needed items. Additionally, U.S. demographics shifts are an added stressor. By 2030, the percentage of Americans 65 years and older will outweigh those under the age of 18, a first in the country’s history, according to Census Bureau projections.

The resulting stress on the Medicare program could impact benefits and cost for beneficiaries.

As sizable numbers of Americans 65 and older face tangible tradeoffs to pay for healthcare, many more Americans in the next decade will incur health and financial consequences because of high costs,” researchers wrote in the report.

The West Health-Gallup poll found about one in four adults aged 65 and above cut back on food, utilities, clothing or medication to cover healthcare costs. That’s compared to three in 10 for adults aged 50 to 64.

Older women and Black adults were more likely to forgo basic necessities to pay for healthcare than other demographics.

More than 20 million Americans aged 50 years and above said there was a time within the last three months when they or a family member was sick, but didn’t seek treatment due to cost.

More than 15 million Americans said they or a family member skipped a pill or dose of prescribed medicine in order to save money.

Researchers urged policymakers to act to improve efficiency and reduce the costs of medical care and prescription drugs in the U.S. Congress has yet to take meaningful action to lower medical costs, despite rising support for government intervention and high-profile proposals from the Biden administration.