qotd: Why patients disenroll from private Medicare Advantage plans

Medicare Rights Center

Summer 2010

Why Consumers Disenroll from Medicare Private Health Plans

This report analyzes data and case notes from the 475 cases presented in 2009 by consumers who called us about disenrolling from Medicare private health plans.

Reasons for Disenrollment (percentage of calls)

24.8% - Provider access problems

21.5% - Misinformation/marketing abuse

19.4% - Coverage problems for medical services

19.4% - Systems/data transfer problems

8.6% - Cost-sharing too high

7.2% - Part D coverage problems

3.2% - Premium increase

Provider Access Problems 

The consumer problems in this category incorporate a wide range of provider access issues. They include general complaints and lack of understanding about the limits on provider access imposed by network-based plans, as well as specific concerns, such as the potential interruption of a valued relationship with a doctor who is being dropped from the plan's network. Provider access problems are often prompted by an acute episode of illness or diagnosis; consumers seek to disenroll when their current plan will not cover care from a home health agency, skilled nursing or other rehabilitation facility, or from a particular specialist, such as a facility or doctor specializing in cancer treatment. This category also includes cases where consumers were misinformed about the limits on provider access before joining.

Disenrollment Due to Cancer  

 

Cancer diagnoses are implicated in a relatively small percentage — less than 5 percent — of the disenrollments, but these cases are some of the most heart-wrenching and most difficult to resolve for Medicare Rights Center caseworkers.

The majority of cancer disenrollment cases — 63.6 percent —  however, involve provider access. The limitations of the private plan networks become apparent after the consumer is referred to a hospital or cancer specialist that is out of network. Treatment of rare or advanced cancers in particular triggers referrals to specialty facilities, such as M. D. Anderson in Houston or Memorial Sloan-Kettering in New York City. During the open enrollment periods, the disenrollments are generally effective the following month. When a person is diagnosed with cancer outside of the open enrollment periods, however, rules that lock consumers into their Medicare Advantage plans for the year generally prevent disenrollment (unless the case also concerns misrepresentation or marketing fraud, as is sometimes the case), and therefore may impede access to the most appropriate cancer treatment facility.

http://www.medicarerights.org/pdf/Why-Consumers-Disenroll-from-MA.pdf

Comment:  This survey does not quantify the extent of patient dissatisfaction with Medicare Advantage plans since it was limited to individuals calling the Medicare Rights Center to find out about disenrolling from the private Medicare Advantage plans. But it does provide us with an understanding of why patients want out of their plans. First and foremost patients complain of a "lack of understanding about the limits on provider access imposed by network-based plans."

The second most common complaint was about misinformation and marketing abuse. This was the primary reason for provider access complaints - the Medicare beneficiaries did not understand that their access would be limited to physicians in plan networks.

This has certainly been infuriating for those who have lost their choice of physicians by enrolling in the Medicare Advantage plans, but it has much greater implications under the Patient Protection and Affordable Care Act. Virtually all plans will have network-based restrictions.

President Obama promised us choice of health plans, but the marketing of his proposal was silent on the fact that virtually all of the plans would have limited access - limited choice of physicians and hospitals - because of provider network restrictions.

With the traditional Medicare program, everyone has free choice of their health care professionals and institutions. That should have been a prime goal of health care reform. It still can be should we decide to enact a single payer national health program - an improved Medicare for everyone.

qotd: What do the revised Anthem Blue Cross prices mean?

The Wall Street Journal

July 1, 2010

WellPoint Scales Back Rate Increases Sought in California

By Avery Johnson

Health insurer WellPoint Inc. is backing off its plan to increase prices by as much as 39% for individuals in California, instead seeking rates for this year that it said would result in a $100 million loss for the company there.

On Wednesday, WellPoint's Anthem Blue Cross unit told the California Insurance Department that it wants to increase prices for individual policyholders by an average of 14%, down from the 25% average it had previously sought.

"The actual rates we would need are higher than this, but we made a business decision to get a rate implemented," said Brian Sassi, WellPoint's president and chief executive of its consumer business unit.

Wellpoint had been hammered for months by the Obama administration and consumer advocates over the size of its initial rate proposal. Angela Braly, its chief executive, and other insurance executives contend that the rising cost of care and demands for higher reimbursement from providers are driving premiums—and that the federal health-overhaul law didn't do enough to control costs.

WellPoint plans to file 2011 rates in California that do cover costs, they said.

Len Nichols, a health economist at George Mason University, said that WellPoint has "been asserting the point that, 'You've got to understand we can't control costs.' And that point has been made, and the message has been heard."

http://online.wsj.com/article/SB10001424052748704334604575339284211797328.html?mod=googlenews_wsj

Comment:  After withdrawing a request for an average 25 percent increase in premiums for individual health plans in California, Anthem Blue Cross is now asking for an average 14 percent increase, which they claim will result in a loss that they will make up with 2011 premium increases. With medical inflation, a further increase in adverse selection, and an adjustment to eliminate losses, next year's premium increases will be even more intolerable.

The Obama administration and members of Congress are critical of these increases, blaming Anthem Blue Cross for excessive profits - as if a $100 million loss in this market somehow reflects egregious profits (though, of necessity, they are profitable in other markets).

Obama and Congress are totally off target when they blame the private insurers. The private insurance model does not and cannot work to control costs and insure everyone, no matter how much market advocates wish it could. It is Obama and Congress who bear much of the blame because they were the ones who decided to keep the private insurers in charge.

Although we can blame our elected leaders now, if we don't communicate to them clearly that they must bring us the reform that we need - a single payer national health program - then we will be left with only ourselves to blame.

qotd: Proof that individuals game the individual mandate

The Boston Globe

June 30, 2010

Short-term insurance buyers drive up cost in Mass.

By Kay Lazar

The number of people who appear to be gaming the state's health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.

The result is that insured residents of Massachusetts wind up paying more for health care, according to the report.

"The active members subsidize some of the costs tied to those individuals who terminate within one year," the report says.

http://www.boston.com/news/health/articles/2010/06/30/short_term_insurance_buyers_drive_up_cost_in_mass/?rss_id=Boston.com+--+Health+news

Report:

http://www.mass.gov/Eoca/docs/doi/Companies/adverse_selection_report.pdf

Comment:  During the reform process the concern was expressed repeatedly that an individual mandate - requiring individuals to purchase their own health insurance - would result in gaming the system. People would enroll when they needed expensive care, and then drop out after the care was completed. The experience in Massachusetts has demonstrated that it did not take long for the public to learn this game, for this is precisely what has happened. Nevertheless, the individual mandate is now the law of the land.

Options being considered to reduce this form of adverse selection include, as examples, allowing open enrollment for only one month per year, or increasing the penalty for remaining uninsured. Although such measures might reduce this tendency to game the system, they will not eliminate it.

It is the structure of the financing system that is fundamentally flawed. It cannot be fixed merely by tweaking the mandate, nor by tweaking the thousands of other provisions in this dysfunctional system. It needs to be replaced with a structurally sound system.

With a single payer national health program the issue of an individual mandate would be moot since everyone would be enrolled, automatically, throughout life.