Patients who leave Medicare plans run by private insurance companies in favor of traditional Medicare end up costing the government much more than typical patients, according to a new analysis by health-policy nonprofit KFF, raising the prospect that the private insurers are denying coverage to patients with costly illnesses.
Overall, the patients fleeing private insurance plans cost 27% more in 2022 than traditional Medicare beneficiaries who hadn’t been enrolled in the so-called Medicare Advantage plans, where the government contracts with insurers to oversee care for seniors and disabled people.
A third of the extra spending came from costly nursing home bills, a type of service a recent U.S. Senate investigation found private insurers deny at unusually high rates, the KFF authors noted.
Medicare Advantage insurers actively manage the care of their patients by requiring approval in advance for many treatments and limiting which doctors members can see. Traditional Medicare rarely requires prior authorization for treatment.
The findings come on the heels of the brazen killing of UnitedHealthcare CEO Brian Thompson on a Manhattan street Wednesday. The shooting brought renewed scrutiny to UnitedHealthcare and other insurers’ practices after a clue emerged suggesting that claims denials may have been part of the motive. Bullet casings recovered at the scene were inscribed with the words “deny,” “delay” and “depose,” phrases that echo rallying cries for people who have protested insurance denials. The unidentified assailant remained at large Friday.
The KFF findings corroborate those of a Wall Street Journal investigation published in November. The Journal’s investigation found Medicare Advantage patients near the end of life left their plans at double the rate of other members, and cost more than twice as much as comparable traditional Medicare members. The dropouts were five times as likely to use often-denied nursing home services within a week of shifting to traditional Medicare compared with other similar members.
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