Medicare Advantage Growth Raises Concerns Over Costs, Care Access, and Provider Relations

Medicare-eligible Nebraskans face critical decisions during the annual open enrollment period ending December 7, choosing between traditional Medicare and Medicare Advantage plans. Independent agents like Rick Cuddeford of Saving Seniors Money provide education without bias to help seniors navigate these options. Medicare Advantage plans, which now cover about 55% of Medicare beneficiaries nationally and 2.8 million people in the Midwest, often appeal due to their low or zero premiums and extra benefits such as dental, vision, and gym memberships. However, these plans include co-pays, out-of-pocket maximums, and require enrollees to use in-network providers, potentially limiting access to preferred doctors and services. Critics, including Jeremy Nordquist from the Nebraska Hospital Association, highlight financial risks seniors face with Medicare Advantage, such as increased prior authorization requirements causing delays in care and denied services. Hospitals report significant challenges dealing with Medicare Advantage insurers, including denied care and low reimbursement rates, contributing to some rural hospitals ceasing to accept these plans. Traditional Medicare, by contrast, typically does not require prior authorization, offers broader provider access, but has rising supplemental insurance costs. Medicare Advantage plans receive monthly payments from the government that have substantially increased alongside enrollment growth, now accounting for approximately 45% of total Medicare expenditures. The Medicare Payment Advisory Commission reports these payments are about 20% higher than costs for similar traditional Medicare beneficiaries, raising questions about efficiency. Insurers use risk adjustment practices, including AI-driven chart reviews, to increase risk scores and payments, attracting bipartisan attention and proposed legislation aimed at enhancing transparency, reducing ‘upcoding,’ and requiring reporting on denied claims. Plans are rated using a Centers for Medicare & Medicaid Services five-star system based on quality and consumer satisfaction, influencing bonus payments and sanctions. However, recent CMS changes reduced the weight of patient experience in ratings, facing legal challenges from Medicare Advantage providers. Past investigations have found Medicare Advantage plans may deny coverage where traditional Medicare would approve, prompting policy clarifications. Health systems like Great Plains Health in Nebraska and major institutions such as Mayo Clinic and Scripps have restricted or stopped accepting Medicare Advantage plans due to administrative burdens and care delays, particularly in rural areas. Denials leading to extended hospital stays for patients have impacted hospital capacity and patient access. Providers express concern that Medicare Advantage plans often do not adhere strictly to Medicare guidelines, resulting in care denials without clear justification. Agent commissions for selling Medicare Advantage plans are regulated and capped, ranging from $92 to $780 for first-time enrollments, contrasting with generally higher commissions for Medigap plans. Rising Part B and supplement premiums increase the appeal of Medicare Advantage for cost-conscious seniors. However, navigating these plans requires careful evaluation, as plan networks and covered benefits can change annually. State Health Insurance Assistance Programs and Medicare.gov offer resources to help beneficiaries compare options and understand provider networks. Overall, the Medicare landscape presents complex choices balancing coverage benefits, costs, provider access, and administrative hurdles. While Medicare Advantage suits generally healthier seniors seeking lower upfront costs and additional benefits, traditional Medicare offers wider provider access without prior authorization but at rising supplemental costs. Policymakers and providers continue to monitor program integrity, payment fairness, and impacts on care delivery, amid increasing enrollment and federal spending on Medicare Advantage plans.