Medicare Advantage, the privatized health insurance for Americans 65 and older, accounts for “an increasing share of inpatient hospital days,” a KFF study published July 23, 2024, shows.
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Medicare Advantage, the privatized health insurance that is becoming an increasingly popular coverage option for seniors, accounts for “a growing share of inpatient hospital days.” According to a new study.
KFF, formerly known as the Kaiser Family Foundation, says in a new report that nearly half, or 48%, of all Medicare hospital days, were attributable to Medicare Advantage enrollees, which “has implications for beneficiaries and health care providers.”
The study shows the growing influence of private health insurers in the administration of Medicare and how this could potentially affect patient choice as well as the operations of hospitals, physician offices, and other healthcare providers. As an example, the report showed that “three in ten hospitals had more inpatient days for Medicare Advantage enrollees than for traditional Medicare enrollees in 2022.”
More than half of all Medicare beneficiaries are already enrolled in Medicare Advantage plans, which contract with the federal government to provide the traditional coverage available in traditional Medicare plus additional benefits and services for seniors, such as disease management and nurse help lines; some also offer vision, dental and wellness programs.
Unlike traditional Medicare, Medicare Advantage plans typically require prior authorization from the insurer before a patient can receive certain treatments for hospital stays, and such plans have also been known to exclude certain doctors, hospitals, and other providers. According to Medicare Advantage plans, these are business practices that help control costs and improve quality, but providers say they can also delay or reduce payments and put financial pressure on doctors and hospitals.
“As Medicare Advantage enrollment increases, decisions by insurers about which hospitals to include in-network and decisions by hospitals about whether to be in a Medicare Advantage network can be expected to affect a larger share of the Medicare population,” the KFF analysis shows. “Recently, some hospitals, health systems, and medical groups have raised concerns on the impact of Medicare Advantage on your finances, with some terminating or threatening to terminate contracts with insurers for late payments, more restrictive coverage determinations, and payment rates. An issue that has recently emerged and drawn scrutiny Among these groups is the practice by Medicare Advantage plans of moving hospitalized patients to “observation status,” which often means lower payments to hospitals and higher costs for patients.
While health insurers are benefiting from an influx of new business as more and more seniors choose Medicare Advantage, it hasn’t all been good for the managed care industry. After all, several health insurers earlier this year reported higher-than-expected expenses due to a surge in patients with pent-up demand for health care in the wake of the COVID-19 pandemic.
During the pandemic, health insurers generally enjoyed record profits in part because people were not seeking medical care at levels before the coronavirus hit in early 2020. When claims were not filed because care was avoided or delayed, medical expenses were more easily managed.
But for much of last year and earlier this year, health insurers, particularly those that sell Medicare Advantage plans, have seen a surge in the number of seniors seeking inpatient procedures and treatments ranging from knee and hip replacements to outpatient surgeries. One of the largest Medicare Advantage plan operators, Humana, Earlier this year he said It was “absorbing unprecedented increases in medical cost trends.”
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