Medicare Advantage (MA) is growing too fast, putting the Medicare program in jeopardy. The government needs to put speed bumps in place to curb its trajectory and bolster traditional Medicare (TM). That is the opinion of a Harvard professor and senior adviser to the Center for Medicare and Medicaid Innovation, who wrote an article about the issue late last week in Health Affairs.
MA, a private form of Medicare insurance, is expected to surpass 50% of eligible Medicare lives within the next year and 69% of the Medicare population by the end of 2030, J. Michael McWilliams, M.D., Ph.D., noted. The Centers for Medicare and Medicaid Services recently added fuel to the expansion for 2023, proposing an 8% increase in reimbursement. Such growth is unsustainable, given that the Medicare Part A Trust Fund is expected to be depleted in 2026.
“Today’s Medicare is not structured to support a dominant MA program. By statute, MA is entirely dependent on TM for establishing its payment rates. As MA grows, local FFS spending will no longer provide a reliable external benchmark. This is not a distant problem but an impending one. Already, some large urban counties are nearing or eclipsing 70 percent MA enrollment.”
Home care increasingly is becoming a strategic part of MA plan offerings. Thanks to supplemental benefits, plans are offering home care and other services to help seniors age in their homes. But major home care firms recently have pushed back on MA plans for their insufficient payments to home care companies.
“As Medicare Advantage continues its growth and if it continues to pay us the way they are now, it’s an untenable situation,” Amedisys Chairman and CEO Paul Kusserow told McKnight’s Home Care Daily Pulse last month.
To help to correct the course of Medicare, the author suggests that Congress or the Centers for Medicare and Medicaid Services update TM’s benefits package and restructure MA to eliminate its generous subsidies; and establish controls for MA payments when MA grows beyond a certain level in a region, the author suggests. Another less-desirable path is to “embrace MA without fortifying TM,” but enact mechanisms for controlling payment growth but ensuring strong competition.
Whatever it does, the government needs to act quickly. “At this point, regulatory options do not present a viable long-term strategy — MA growth will continue to force a reckoning — but they can avert undesirable developments by buying time for more decisive action,” he said. “Even modest corrections can meaningfully alter trajectories, but only if they are made early enough in the course.”
