MedPAC Offers a Look at Enrollment Hiccups for Medicare Beneficiaries
Beneficiaries face a series of complex decisions in enrolling in Medicare coverage, and a key federal panel outlines some of the pain points.
The Medicare Payment Advisory Commission (MedPAC) released its June report to Congress on Monday, where it notes that when an individual becomes Medicare eligible, they have to immediately make a series of decisions about coverage that may be confusing.
Eligible individuals are also tasked with similar decision points at other times in the year, which adds to the complexity, per MedPAC.
"The complexity of the choices and numerous sources of information make it increasingly difficult for individuals to understand the requirements and relevant time frames for enrollment," the commission wrote in the report.
For example, beneficiaries may not have a full understanding of the differences between what Medicare Advantage (MA) plans and traditional Medicare may offer. MA plans generally carry lower premiums and have out-of-pocket maximums, but also have more restrictive networks or utilization management that beneficiaries wouldn't see in the traditional program.
On the other hand, traditional Medicare enrollees may face significant costs for certain services and higher premiums if they choose to add on supplemental coverage like Medigap. MA also often offers additional benefits that aren't available in fee-for-service Medicare, per the report.
In addition, beneficiaries may wish to switch between MA plans or return to the traditional program in the middle of the year, and may not be aware of enrollment periods or eligibility requirements in making changes to their coverage, MedPAC said.
Further muddying the waters is the bevy of direct-to-consumer advertising that comes from MA insurers, brokers and other third parties, according to the report.
Beneficiaries lean on a number of tools to find information about enrollment timelines as well as benefits. The Centers for Medicare & Medicaid Services (CMS) offers multiple platforms, including the online Medicare Plan Finder and several handbooks.
The federally-funded State Health Insurance Assistance Program (SHIP) offers counseling and support for enrollees. However, the report notes funding for SHIP has fallen short of Medicare enrollment growth, which can hinder the ability to reach the full number of people who need support.
Many beneficiaries seek information from insurance brokers who can assist in enrolling in Medicare Advantage, Medigap, Part D and other programs. However, these brokers may have financial incentives to steer enrollees to specific plans or insurers, and bonus payments are not subject to federal limits.
"In our annual focus groups, many beneficiaries report positive experiences working with agents, but some stakeholders have voiced concern that agents have financial incentives to steer beneficiary decision-making toward certain plans over others," MedPAC said in the report.
Report throws cold water on hospitals' MA concerns
The advisory group’s report undercuts a key argument often cited by providers seeking additional support from policymakers: that the increased penetration of Medicare Advantage plans, particularly in rural markets, is dangerously dragging providers’ financial stability.
Specifically, a slew of empirical analyses conducted by MedPAC staff showed no evidence of a significant association between MA market penetration and the all-payer margins of hospitals, skilled nursing facilities and home health agencies, on average.
These providers’ margins showed similar changes over time when directly comparing (with controls for potential confounding factors where able) those who saw greater increases in MA enrollment to those with smaller increases, with MedPAC noting that hospitals’ margins have “remained relatively flat or increased slightly from 2013 to 2024, a period during which MA penetration increased substantially.”
MedPAC did find some changes in revenues, costs and utilization trends. For instance, MA enrollees’ average length of stay in fiscal year 2024 was 11.2% longer than fee-for-service beneficiaries, but ran longer (and thereby costlier) for those being discharged to a post-acute care facility. Meanwhile, greater MA penetration was tied to dips in total facility days at skilled nursing facilities, as well as small declines in revenues and costs at skilled nursing facilities and home health agencies.
“As the commission itself has found, MA has not delivered on its intent to reduce Medicare spending; and yet, despite taxpayers paying billions more to these plans, they routinely delay and deny patients care,” Molly Smith, group vice president of public policy for the American Hospital Association, said in a statement. “In addition, both our own analyses and external evidence show that MA imposes materially greater, and inappropriate, administrative burdens on hospitals and the beneficiaries they serve as compared to Traditional Medicare. We urge MedPAC to carefully consider the role of MA in driving up hospitals’ costs and Medicare spending to strengthen the program so that it works for patients and the providers who care for them.”