Members leaving Medicare Advantage have higher expenses, KFF finds: 5 things to note

Medicare spends more on beneficiaries who switch from Medicare Advantage to traditional Medicare compared to those who remained enrolled in traditional Medicare, a report from KFF found. 

The report, published Dec. 6, compared spending for beneficiaries who switched from Medicare Advantage in 2021 to traditional Medicare in 2022 with spending for those continuously enrolled in traditional Medicare.

The report, "raises a lot of questions" as to why enrollees leave Medicare Advantage plans, Jeannie Fuglesten Biniek, associate director of the program on Medicare at KFF and an author of the study, told the Wall Street Journal. 

"Were they not getting the medical care they needed in Medicare Advantage?," Ms. Biniek said. 

An investigation published in the Wall Street Journal in November found beneficaries were more likely to drop out of Medicare Advantage plans when they faced higher-acuity conditions, especially in the last year of their life. 

Here are five findings to note: 

1. Medicare spent an average of $2,585 more for beneficiaries who disenrolled from Medicare Advantage than those continuously enrolled in traditional Medicare. 
   
   
2. Differences in spending were higher among enrollees with certain chronic conditions. The federal government spent 34% more on average for enrollees with diabetes who disenrolled from MA compared to individuals with diabetes continuously enrolled in traditional Medicare.
   
   
3. Spending differences were more pronounced among older beneficiaries. Medicare spent 46% more on beneficiaries aged 85 and older who disenrolled from Medicare Advantage than on those continuously enrolled in the same age group.
   
   
4. Among Black and Hispanic beneficiaries, CMS paid 55% and 54% more, respectively, for those who switched to MA than for those who remained in traditional Medicare. 
   
   
5. Skilled nursing facility care accounted for around one-third of the difference in spending between those switching out of MA and those continuously enrolled in traditional Medicare. 

A spokesperson for AHIP, the trade association representing insurers, told the Wall Street Journal the report "paints an incomplete and misleading picture of Medicare spending trends and beneficiaries' experiences." 

Read the full report here.