A recent report from the Commonwealth Fund concluded there is little competition anywhere in the United States for private Medicare Advantage (MA) Plans. Researchers found that 97 percent of markets in the US counties were “highly concentrated” where a small number of insurers dominated. In rural markets, the competition is even worse.
With recent insurance merger announcements, many experts are concerned the dwindling competition will hurt consumers.
How Medicare Advantage Plans Work
MA Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare pays a fixed amount for your care each month to private insurers offering MA Plans. These companies must follow rules set by Medicare, but can charge different out-of-pocket costs or establish rules for how you get services (ex: whether you need a referral to see a specialist). These rules can change each year.
Why Industry Consolidation May Affect Consumers
UnitedHealth Group, Humana, and Aetna are all major players in the private MA market. Competition could weaken further as Humana and Aetna recently announced their plans to merge together. In addition, two other major national insurers, Anthem and Cigna, recently announced their plans to merge.
Consumer advocates say competition from private insurers benefits patients by reducing Medicare costs and improving their quality of coverage. With five of the largest insurers potentially consolidating down to three, consumers could be left with higher prices or fewer plan options. Insurers disagree with this argument, stating MA Plans will still be competitive despite consolidation.
What This Could Mean for Practices
According to the Centers for Medicare and Medicaid Services (CMS), MA enrollment has increased by 42 percent since the passage of the Affordable Care Act to an all-time high of more than 16 million beneficiaries. Nearly 30 percent of Medicare beneficiaries are enrolled in a MA Plan.
With a growing percentage of patients on MA Plans, practices may reevaluate whether or not they accept patients with this coverage. With potentially fewer MA Plan options, practices may not have as much leverage in negotiating their reimbursement rates. No matter the decision, it is essential practices stay up-to-date on payer policies and ensure proper processes, like obtaining insurance authorizations prior to an appointment, are in place so there are no reimbursement surprises down the road.
What do you think of these report findings? Have you seen concentration of MA Plans in your community? Comment below.