Medicare Advantage Skips Out on Paying for End-of-Life Care

July 29, 2021

Medicare Advantage: Beneficiary Disenrollments to Fee-for-Service in Last Year of Life Increase Medicare Spending
U.S. Government Accountability Office (GAO)
June 28, 2021

Medicare Advantage (MA) beneficiaries in the last year of life disenrolled to join Medicare fee-for-service (FFS) at more than twice the rate of all other MA beneficiaries, GAO’s analysis found. MA plans are prohibited from limiting coverage based on beneficiary health status, and disproportionate disenrollment by MA beneficiaries in the last year of life may indicate potential issues with their care. Stakeholders told GAO that, among other reasons, beneficiaries in the last year of life may disenroll because of potential limitations accessing specialized care under MA.

Beneficiaries in the last year of life who disenrolled from MA to join FFS increased Medicare costs as they moved from MA’s fixed payment arrangement to FFS, where payments are based on the amount and cost of services provided. GAO’s analysis shows that FFS payments for such beneficiaries who disenrolled in 2016 were $422 million higher than their estimated MA payments had they remained in MA, and were $490 million higher for those that disenrolled in 2017.

Prior GAO and other studies have shown that beneficiaries in poorer health are more likely to disenroll from MA to join FFS, which may indicate that they encountered issues with their care under MA. Beneficiaries in the last year of life are generally in poorer health and often require high-cost care.

Comment by Eagan Kemp

This report is a bombshell — even when delivered in GAO’s typically understated style. Having been a senior analyst at GAO for more than a decade before coming to Public Citizen, I can tell you that it takes an overwhelming amount of substantiated evidence to state things as strongly as they do in this report.

The implications couldn’t be more clear and the profit motive more transparent. Medicare Advantage plans — as they also do with other high-cost patients in poor health — are finding ways to avoid paying the high costs of end-of-life care. They often do this through limiting access to specialized care through narrow networks or other unscrupulous means.

These vulture Medicare Advantage companies will stop at nothing to keep their profits high — including forcing beneficiaries and their families to jump through numerous hoops to disenroll from predatory Medicare Advantage plans and enroll back into traditional Medicare at the worst possible time. And all so that traditional Medicare is left to pay the bills instead of Medicare Advantage plans. I am not sure how these people sleep at night.

It should be no surprise that insurers do everything in their power to evade the one thing they are supposed to do: pay for the care their enrollees need. It is exactly why insurers were insanely profitable during the COVID-19 pandemic — by NOT paying for care.

If it wasn’t already clear by now, these findings drive home the point that insurers add nothing but misery and administrative hurdles for patients while raising the overall cost of the health care in America through massive waste, fraud, and abuse.

It is time to end their ability to hurt patients and reap insane profits. It is time for Medicare for All.