More Medicare dollars are now flowing to Medicare Advantage plans than traditional fee-for-service plans, according to a new report by the Kaiser Family Foundation.
The study found that while 48% of the Medicare-eligible population (28 million people) are enrolled in MA plans, the plans account for 55% ($427 billion) in total federal Medicare spending. Kaiser found that approximately 1 in 5 MA plan beneficiaries are enrolled in plans sponsored by their employers or a labor union. MA accounts for more than half of Medicare enrollees in 24 U.S. states. North Dakota, South Dakota and Wyoming have the smallest percentage of MA plan enrollment at less than 20%.
The report also found that UnitedHealthcare and Humana together account for nearly half (46%) of MA plans. That is significant to home health and hospice because both companies have stakes in the segments. UnitedHealth is buying home care and hospice giant LHC Group for $5.4 billion. Although Humana divested the majority stake in the personal care and hospice divisions of Kindred at Home, the company will continue to be a minority stakeholder in these operations and have a strategic partnership with them.
MA plans increasingly have become popular with seniors over the past decade, nearly doubling their share of the Medicare marketplace. An analysis of the plans earlier this year by ATI Advisory found MA plans save enrollees about $2,000 annually in premiums and out-of-pocket costs. The plans are also popular because many offer a number of supplemental benefits including home care, nonmedical transportation and handyman services.
However, the plans have come under increased scrutiny in recent months. In April, the Office of Inspector General issued a report accusing MA plans of delaying or denying payments to providers covered under Medicare. In June, witnesses told the House Energy and Commerce subcommittee that MA plans are falling short in providing care to seniors.
