Medicare Advantage was introduced in 2003 by Congress as a way to streamline healthcare coverage for the millions of Americans who rely on Medicare.
This part of the federal healthcare program introduced private insurance providers, who have been approved by Medicare, to take on the responsibility of Medicare users’ insurance plans.
These private companies include significant industry players like UnitedHealth, Humana, CVS Health Corporation, and more.
Now, more than half of Americans who are eligible for Medicare are enrolled in Medicare Advantage. This equates to nearly 31 million Americans.
As promising as the program sounded, nearly 20 years later, problems are arising.
In a report published in 2023 by the Medicare Payment Advisory Commission (MedPAC), a non-partisan agency of Congress, they note that it “cannot conclude that Medicare Advantage plans systematically provide better quality than traditional Medicare.”
According to a report published by the National Institutes of Health, the function of Medicare Advantage plans has historically been to lessen the cost of Medicare and to allow users more options in their medical treatment and care.
An NBC News report found that Medicare Advantage consistently denies its users claims and in turn, “these denials force the hospitals to eat the increasing costs of care, causing some to close operations and leave residents without access to treatment.”
This happens when more and more residents in these communities become reliant on their Medicare Advantage plans and hospitals have to then absorb the cost of their patients who cannot pay for services when their insurance is denied.
The NBC News report also discovered from hospital officials, that Medicare Advantage companies would deny coverage despite having already approved it forcing the hospitals to give the money back to the insurance companies.
The MedPac report also found that Medicare Advantage plans are more expensive than regular Medicare, in fact Medicare typically pays out the Medicare Advantage plans 6% more than if those same enrollees were in the regular Medicare plan.
The popularity of Medicare Advantage plans has only grown in the past few years. With more than half of all Medicare eligible Americans enrolled in Medicare Advantage these statistics and stories become increasingly concerning.
It leaves curious minds wondering: What happens when retirees can no longer afford their healthcare?