Medicare is a crucial source of health insurance for nearly 45 million Americans, primarily seniors aged 65 and older, as well as 7 million younger adults with permanent disabilities. Before Medicare was signed into law in 1965, about half of all seniors lacked hospital insurance. Today, virtually all people aged 65 and over are covered by Medicare. However, the program faces a number of issues and challenges in the years to come, including how to finance care for future generations without unduly burdening beneficiaries, taxpayers, or the general economy. Another pressing issue relates to the role of private plans in Medicare, in light of rapid enrollment growth in recent years, and concerns about the current payment system for private plans. The future direction of the program appears to be governed by differences in ideology, particularly the role of government versus the private sector[1].
In recent news, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would revise the Medicare Advantage Program (MA), Medicare Prescription Drug Benefit Program (Part D), Medicare Cost Plan Program, Programs of All-Inclusive Care for the Elderly (PACE), and Health Information Technology Standards and Implementation Specifications. The proposed policies build on existing Biden-Harris policies to strengthen beneficiary protections and guardrails to promote healthy competition and ensure Medicare Advantage plans best meet the needs of beneficiaries. In addition, these proposed policies would promote access to behavioral health care providers, promote equity in coverage, and improve access to care for all Medicare beneficiaries. These proposed policies advance the goals of President Biden’s historic Competition Council and Executive Order signed in July 2021 by helping to ensure a robust and competitive Medicare Advantage marketplace[2].
Despite the proposed policies to strengthen the Medicare Advantage program, there have been reports of hospitals nationwide dropping Medicare Advantage plans due to excessive prior authorization denial rates and slow payments from insurers. This has raised concerns about the sustainability of the current system and the need for patients to be aware of how different models work. Traditional Medicare is not an issue, but with other models, seniors need to be wary and savvy buyers[4].
Looking ahead, the Medicare Advantage marketplace in 2024 is expected to offer the average Medicare beneficiary a choice of 43 plans, the same as in 2023, offered by an average of 8 insurers, one less than in 2023. Medicare Advantage plans can be attractive to beneficiaries because they typically offer extra benefits, such as dental, vision, and hearing, often for no additional premium, with the trade-off of more restrictive provider networks and greater use of cost management tools, such as prior authorization. The majority (83%) of Medicare Advantage plans are offering telehealth in 2024, but there has been a decline from 2023, when 97% of plans offered these benefits. This analysis focuses on the Medicare Advantage marketplace in 2024 and trends over time, including nearly 31 million enrollees in Medicare Advantage plans in 2023[5].
In conclusion, Medicare Advantage plans play a crucial role in providing additional benefits to Medicare beneficiaries, but the program faces challenges related to financing, the role of private plans, and the sustainability of the current system. The proposed policies to strengthen the Medicare Advantage program aim to address some of these challenges and ensure a robust and competitive marketplace for beneficiaries. However, concerns about the sustainability of the current system and the need for patient awareness remain important considerations for the future of Medicare Advantage.
Citations:
[1] https://www.kff.org/health-reform/issue-brief/medicare-now-and-in-the-future/
[2] https://www.cms.gov/newsroom/fact-sheets/contract-year-2025-policy-and-technical-changes-medicare-advantage-plan-program-medicare
[3] https://www.linkedin.com/pulse/2023-2030-professional-indemnity-insurance/
[4] https://www.beckershospitalreview.com/finance/hospitals-are-dropping-medicare-advantage-left-and-right.html
[5] https://www.kff.org/medicare/issue-brief/medicare-advantage-2024-spotlight-first-look/
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