UCLA Faculty Association: More on Has the Worm Turned on Medicare Advantage

Tuesday, June 11, 2024

More on Has the Worm Turned on Medicare Advantage

In an earlier post, we noted that Medicare Advantage plans - a form of privatized Medicare - now cover over half of the Medicare population (seniors and disabled) in the U.S. but that the growth in coverage seemed related to overpayment for the coverage by the feds.* There have in fact been several news articles over the years pointing to this situation. Because of the incentives provided by the overpayment, private insurers promote these plans through TV ads and other means. Typically, the plans have special features to invite participation such as gym memberships. More recently, the feds seems to be catching on to the overpayment.

The problem with these privatized plans involves the turning over of determination of eligibility for treatments to private insurers and the narrow networks the plans offer. In theory, the plans are supposed to offer whatever traditional Medicare does. But participants may have to jump through hoops to get treatment and may find the narrow networks and the limited providers in them to be a problem. Until someone has a major illness, these limitations may not be apparent.

Fortune now has an article indicating that it is not just participants that have responded to the incentives to move to Medicare Advantage. Employers who offer subsidized retiree healthcare in some cases make Medicare Advantage the only option.

Usually, after age 65, you have two Medicare options: traditional Medicare (Parts A, B, and D, and often a Medigap plan) or a private health insurer’s Medicare Advantage plan, also called Part C. But increasingly, people with retiree health benefits from their former employers aren’t given that choice. Instead, they’re told they can enroll only in a Medicare Advantage plan, with its limited network of doctors and hospitals, even if they would prefer going with the less restrictive traditional Medicare.

Reject the Medicare Advantage plan, they’re told, and they’ll lose their retiree health benefits, sometimes in perpetuity. “It’s a lot to ask someone potentially to consider giving up their retiree benefits,” says Meredith Freed, a senior policy manager with the Program on Medicare Policy at KFF, a nonpartisan health care policy research, polling, and journalism group...

A new KFF report found that 12 states now offer only Medicare Advantage to their Medicare-eligible retirees, a 50% rise from 2016. The 12 states: Alabama, Arizona, Colorado, Connecticut, Georgia, Illinois, Kentucky, Maine, Missouri, New Hampshire, Pennsylvania, and West Virginia.

While only 21% of big employers offer health benefits to retirees (down from 66% in 1988), roughly two-thirds of large companies that offered retirees Medicare Advantage in 2023 didn’t permit them to enroll in traditional Medicare, according to KFF. In 2022, just 44% of those firms allowed Medicare Advantage only...

Full story at https://fortune.com/well/article/medicare-advantage-retirement/.

Blog readers readers may recall that at one point UCOP seemed to be toying with the idea of switching those participants on retiree health care to Medicare Advantage as the only plan. After a fuss was kicked up when the planning was revealed, the decision was made simply to offer Medicare Advantage as a low-cost option and retain traditional Medicare supplements.

Below is UCLA Emeriti Association-Elect President Richard Weiss complaining to the Regents' Health Services Committee in 2019 about a proposed switch to Medicare Advantage only: