Why Chronically Ill Patients Are Migrating to Medicare Advantage
Older Americans with chronic health problems, mental illnesses, and substance abuse problems are increasingly turning to Medicare Part C health insurance plans. A recent study from the Better Medicare Alliance (BMA) found that 70% of survey respondents with chronic illnesses report they are more likely to choose a Medicare Advantage plan.
Chronic medical conditions now account for 94% of Medicare spending — the bulk of which is for Medicare Advantage enrollees. Medicare Advantage plans are more likely to attract patients with disabilities and substance abuse than traditional Medicare. Medicare Advantage enrollees have a 57.4% higher substance abuse rate.
Background
According to the Kaiser Family Foundation, total enrollment in Medicare Advantage plans has doubled over the past 10 years. Medicare Advantage now accounts for almost 42% of Medicare beneficiaries. The Congressional Budget Office projects that MA's market share will reach over 50% by 2030.
But Medicare Advantage plans are maintaining high approval ratings while generating lower out-of-pocket health care expenditures for their beneficiaries, according to BMA officials. These plans can produce a 40% lower out-of-pocket cost burden when compared to traditional Medicare coverage. Out-of-pocket costs in Medicare Advantage plans are approximately $1,640 lower than Traditional Medicare, according to the BMA.
Medicare Advantage beneficiaries are frequently lower income: More than half of beneficiaries have household incomes lower than $24,500.
At the same time, Most Medicare Advantage enrollees have access to benefits unavailable under Traditional Medicare. Examples include:
- Eye exams and glasses
- Over-the-counter medications
- Telehealth
- Dental care
- Hearing aids
- In-home support
Special supplemental benefits for the chronically ill
Contributing to Medicare Advantage's increasing popularity among those with chronic health conditions is the newly-expanded Special Supplemental Benefits for the Chronically Ill program (SSBCI). This program targets chronically-ill beneficiaries with a series of supplemental non-medical services designed improve outcomes and reduce hospitalizations.
Examples include:
- Meal delivery
- Transportation (for non-medical reasons)
- Indoor air quality equipment
- Home modifications
- Pest control
In part as a result of these expanded benefits, Medicare Advantage beneficiaries had 41% fewer avoidable acute hospitalizations and 18% fewer avoidable chronic hospitalizations, respectively, than Traditional fee-for-service Medicare beneficiaries.
Special Needs Programs (SNPs)
Additionally, Medicare Advantage enrollees are increasingly signing up for Special Needs Plans (SNPs). These are sub-plans that tailor their benefits package to meet the needs of patients with specific chronic conditions, who are in nursing homes or other institutions, and are also eligible for Medicaid. These SNPs are staffed with physicians and other staff specializing in the conditions affecting their members.
SNP enrollment increased from 2.9 million to 3.3 million beneficiaries from 2019 to 2020 – a 15% increase in just one year, according to Kaiser Family Foundation data. SNPs now account for 14% of total Medicare enrollment.
To join an SMP, you must meet the following criteria:
- You must require nursing care at home, or
- You must be eligible for both Medicare and Medicaid, or
- You must have a specific chronic or disabling condition, such as HIV/AIDS, end-stage renal disease, dementia, or chronic heart failure.
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