Medicare Advantage plans have little reason to address people’s long-term health needs

By Diane Archer
Published September 13, 2023
Nearly half of all Medicare Advantage members leave their Medicare Advantage plans within five years of enrolling, according to a recent study by David Meyers et al. at the Brown University School of Public Health published in the JAMA Network. Most of them are locked out of traditional Medicare because they are unable to get supplemental coverage, so they switch to other Medicare Advantage plans. Because insurers offering Medicare Advantage plans know they are not likely to hold on to their members over the long-term, they have little reason to address people’s long-term health care needs.
The government pays Medicare Advantage (MA) plans a fixed rate per enrollee, regardless of the amount of money the MA plans spend on each enrollee. The thought is that these generous payments would lead the insurers offering MA plans to invest in the long-term heath and care outcomes of their members. But, the data suggests otherwise. The researchers suggest that their findings provide a strong reason for looking at long-term MA disenrollment rates when measuring MA performance as a means of helping to ensure MA plans do not disregard their members’ long-term health care needs.
Researchers studied 82,377,917 individuals enrolled in a Medicare Advantage plan any time from 2011 to 2020. Of those, overall, nearly half (48 percent) left their MA plan within five years of joining. One-third left their MA plan within three years of joining. Disenrollment rates varied substantially by Medicare Advantage plan.
These findings adds support to the case that Medicare Advantage plans are likely not invested in the long-term health and care management of their members, as hoped. Data on inappropriate denial rates in Medicare Advantage, particularly for people in hospital and people in need of post-hospital care also suggests that Medicare Advantage plans, as a whole, have little or no interest in ensuring the health and well-being of their members. Rather, the denial data suggests that once their members get sick and need costly care, the MA plans want them to leave.
The researchers at Brown have found that people enrolled in Medicare Advantage plans who have complex and costly needs disenroll from their plans at higher frequency than people who are in relatively good health. Now, these researchers find that, over time, half of people disenroll from their Medicare Advantage plans. The researchers did not study why, but there’s a compelling argument that these people disenrolled because they were dissatisfied with their plans.
The researchers further found that Black Medicare Advantage enrollees disenrolled from their Medicare Advantage plans at higher rates than enrollees of other races. Nearly 15 percent of them disenrolled from their Medicare Advantage plans within one year of enrolling.
Of note, a smaller portion of people enrolled in plans with five-star ratings disenrolled within five years as people enrolled in four- and three-star plans.
In sum, the researchers report three key findings from their work, in addition to their finding that 48.3 percent of people enrolled in Medicare Advantage plans who do not also have Medicaid left their Medicare Advantage plans within five years.