Analysis by Kaiser Family Foundation (KFF) examines consumer experiences with health insurance.
Though the majority of insured adults give their health insurance positive ratings, more than half experience problems when using their insurance, according to a KFF survey.
To better understand how people feel about their health coverage and how it works for them, the KFF Survey of Consumer Experiences with Health Insurance interviewed 3,605 insured adults with Medicare, Medicaid, or a health plan through the Affordable Care Act marketplace.
The data revealed that 81% of respondents give their insurance an overall rating of "excellent" or "good," with ratings varying based on health status.
Despite the positive ratings, 58% of adults said they have experienced a problem using their insurance in the past year, with issues including denied claims, provider network problems, and prior authorization snags.
Among those that reported issues with their insurance, nearly half said their biggest problem was either not resolved (19%) or resolved in a way they were unsatisfied with (28%). Furthermore, 17% said they were unable to receive recommended care as a direct result of their problems, while 15% reported they experienced a decline in their health and 28% said they paid more than they expected for care because of their problems.
The survey also asked the respondents how well they understand aspects of their insurance and found that 51% find at least one aspect of how their insurance works at least somewhat difficult to understand. Meanwhile, more than a third of adults (36%) said it is at least somewhat difficult for them to understand what their insurance will and will not cover.
Making health plans more understandable and easier to navigate can go a long way for payers in improving member satisfaction. According to the recent J.D. Power study, commercial health plans are struggling to meet patients' engagement needs as member satisfaction continues to decline.
"Having coverage is valuable to people, and so not surprisingly, most who have it rate it favorably overall," KFF wrote. "But we don't buy health insurance in case we stay healthy, so monitoring how coverage works for people who are sick is particularly important in gauging how well our health insurance system works when people need it the most."
Analysis by Kaufman Hall advises hospital and health system leaders on responding to present and future economic pressures.
The federal government and its current budget construct are the biggest challenges to healthcare organizations' financial sustainability, according to Kaufman Hall.
Eric Jordahl, the managing director of the financial and performance consulting company, offered his insight on how hospitals and health systems must adapt to the government dictating the financial environment as the leading payer.
Though an agreement to suspend the $31.4 trillion debt ceiling until January 2025 was reached earlier this month, the federal budget construct is unsustainable in the long term and Congress' eventual attempts to restructure spending will impact healthcare organizations, Jordahl writes.
The analysis highlights that the Congressional Budget Office (CBO) earlier estimated federal spending to reach $9.8 trillion (25% of forecasted GDP) by 2033 and debt held by the public to exceed $45 billion (118% of forecasted GDP) over the same period. CBO's estimates indicate that the 2023 debt ceiling agreement should generate around $1.3 trillion in savings over a decade, which Jordahl states isn't consequential due to expected expenditures.
"All this confirms that the greatest threat to healthcare's financial and credit foundation remains the federal government's role as lead payer," Jordahl writes. "Other important pressure points include state fiscal health and the specter of recession (which may work differently if continued hiring translates into a 'full-employment recession'). But the big resource engine is the federal government, and its current budget construct isn't sustainable."
Jordahl mentions that Congress can attempt one or a combination of: restructuring programs to reduce cost, raise taxes, or tolerate escalating debt. Regardless, " any solution is likely to mean constrained resources for healthcare."
To prepare, hospitals and health systems should improve cash flow to improve both internal capital and the ability to access external capital, Jordahl advises.
Focusing only on improving operational performance won't be enough—organizations should also aim to manage their balance sheet.
As hospitals and health systems continue to combat challenges stemming from the COVID-19 pandemic, they also need to plan for the realities of the federal budget, an issue that "is likely to define healthcare’s experience for the foreseeable future."
The report by Human Rights Watch questioned nonprofit hospitals' role in the country's healthcare system.
The American Hospital Association (AHA) and Catholic Health Association (CHA) released a joint statement firing back at a Human Rights Watch report on nonprofit hospitals' contribution to healthcare's medical debt problem.
The report, titled "In Sheep's Clothing: United States' Poorly Regulated Nonprofit Hospitals Undermine Health Care Access," puts nonprofit hospitals and the community benefits they provide under the microscope.
Human Rights Watch cited Kaiser Family Foundation's survey in 2022 that 41% of Americans had some sort of medical debt, as well as Urban Institute's survey in March that about 73% of adults with past-due debt reported owing at least some of that debt to hospitals.
"The US heavily relies on these privately operated nonprofit hospitals' charity care to increase access to health care for patients who cannot pay for hospital services, such as emergency treatment, diagnostic work, and inpatient surgeries," the report stated. "But given the high prevalence of hospital-related medical debt in the US, this system is clearly not working."
AHA took exception with the report's takedown of nonprofit hospitals as well as its "understanding of the community benefits tax-exempt hospitals provide or the IRS regulations they are subject to."
"America's hospitals and health systems, regardless of size, location, or type, are committed to treating all patients with respect and dignity while providing high quality, accessible care, regardless of ability to pay or health insurance status," AHA president and CEO Rick Pollack and CHA president and CEO Sr. Mary Haddad said in a statement.
"The report released today from Human Rights Watch — based in part on research funded by an organization with a track record for bias — conspicuously focuses on tax-exempt hospitals, largely in the absence of other sectors of health care, such as commercial insurers, drug, or device companies that contribute to hospital expenses as well as consumer debt. It all but ignores that the root cause of medical debt is inadequate commercial health care coverage."
New analysis highlights the need for reform in the private program as it continues to grow in enrollment.
Overpayments to Medicare Advantage (MA) plans could exceed $75 billion this year, nearly tripling estimates by the Medicare Payment Advisory Commission (MedPAC), according to research by the USC Schaeffer Center for Health Policy & Economics.
The overpayments are due to favorable selection of MA plans, with MA rates paid to plans based on spending by fee-for-service beneficiaries. Researchers found that millions of beneficiaries in traditional Medicare who have switched to MA have lower spending than those with similar health risks who stayed.
MedPAC estimated that MA plans would be overpaid by $27 billion in 2023, mostly due to coding intensity of enrollee health conditions combined with bonus payments related to quality. That estimation did not factor in favorable selection of MA plans.
USC Schaeffer Center researchers pointed to 46.9% (11.3 million) of MA enrollees switching from traditional Medicare from 2006-2019, with 29.5% (7.1 million) switching to MA from 2015-2019 alone. The private program's growth necessitates more reform, the researchers stated.
"The skewed distribution of expenditures and the consistent trend of beneficiaries with below-average spending choosing Medicare Advantage plans have significant financial implications and are adding to the fiscal strain on the Medicare system," Steven Lieberman, a nonresident senior fellow at the USC Schaeffer Center, said in a press release.
"Reform options must strive to improve the relationship between FFS expenditures and Medicare Advantage payments. Another option is to delink Medicare Advantage payments from FFS as the current rate-setting system grows increasingly unreliable and problematic."
To improve rate setting, researchers suggest two reforms. The first is to alter the current payment approach linking plan rates to average spending by traditional Medicare beneficiaries, which could include new data reporting requirements for MA plans and measures to cut down on aggressive coding.
The second reform suggested is to institute competitive bidding MA plans, which would allow market forces to determine what MA plans are paid, capturing efficiency gains for taxpayers.
Researchers conclude that without reform, MA plans will continue to be the beneficiary of overpayments, threatening the Medicare program in the long term.
"Regardless of which approach is chosen, policymakers should proceed with a solution to shore up the fiscal solvency of the Medicare Trust Fund and the impact on overall federal budget deficits," said Paul Ginsburg, senior fellow at the USC Schaeffer Center and professor of the practice at the USC Price School of Public Policy.
A new report shows hospital operating margins have stabilized even as expenses show no signs of slowing down.
Hospitals managed to stay afloat in April in the face of ongoing expense increases and a rise in total bad debt and charity care, a report by Syntellis Performance Solutions revealed.
The monthly Syntellis Performance Trends Healthcare reportuses data drawn from 135,000 physicians from over 10,000 practices and 139 speciality categories, as well as from 500-plus unique departments across more than 1,300 hospitals.
In April, median hospital operating margins remained just above zero at 0.4% for the second consecutive month after 15 months of negative margins.
Meanwhile, it was also the 12th month of year-over-year increases in total expense and total non-labor expense, which increased 2.2% and 3.7%, respectively. Total labor expenses experienced a 1.1% year-over-year rise in April, making it 11 of the past 12 months of year-over-year increases.
"While a steadying of hospital operating margins is a positive sign, our nation's hospitals and health systems remain on dangerously thin ice with extremely narrow operating margins," Steve Wasson, executive vice president and general manager for Data and Intelligence Solutions at Syntellis, said in a press release.
"Healthcare leaders are finding ways to meet evolving patient needs and grow revenues, but relentless expense increases and other economic and industry challenges threaten to plunge them back into the red at any time."
High expenses were driven in part by labor expenses for nurses, which worsened as the industry continues to feel the effects of nursing shortages. Compared to April 2021, the nursing labor expense per patient rose 17.6%.
Additionally, hospitals dealt with bad debt and charity care, which was up 15% year-over-year and 7.6% month-over-month. Those figures may worsen in the coming months as millions are expected to lose Medicaid coverage as states roll back COVID-19 pandemic provisions.
Kaufman Hall's most recent National Hospital Flash Report also highlighted increases in bad debt and charity care in April due to the widespread disenrollment.
Poor customer service and communication scores brought down customer satisfaction in J.D. Power's new study.
Commercial health plans are struggling to meet patients' engagement needs as member satisfaction continues to plummet, a study by J.D. Power shows.
The data analytics, advisory services, and consumer insights company released its 2023 U.S. Commercial Member Health Plan Study, which measures satisfaction among members of 147 health plans in 22 regions throughout the country. Responses for the 17th annual report are from 32,656 commercial health plan members, fielded from January to April 2023.
Member satisfaction is measured by evaluating six factors: billing and payment, cost, coverage and benefits, customer service, information and communication, and provider choice.
The study found that overall satisfaction dropped by 13 points (on a 1,000-point scale) this year, mostly due to a 33-point decrease in satisfaction with customer service. Other areas that suffered notable decline were coverage and benefits (-20), provider choice (-16), and information and communication (-16).
Meanwhile, among patients with a self-reported health status of "poor/fair," 36% said their health plan helped them coordinate care. That figure jumped to 43% among patients with a self-reported status of "very good/excellent."
Additionally, the study revealed that the average Net Promoter Score for new members was 6 (on a scale of -100 to 100), compared to 25 for established plan members, indicating that health plans are falling short on providing information and support on navigating their benefits.
Finally, the report uncovered that digital usage by members for all tools and support remains under 50%. Usage of online health assessments was 18% among the sickest patients, while use of chronic disease management tools was 8%, use of online triage and nursing support was 10%, and remote monitoring was 6%.
Though the study found members' usage of digital tools lacking, another report by Accenture identified ease of navigation, including poor experiences using digital tools, as the top reason why beneficiaries leave their health plans.
A separate study by American Customer Satisfaction Index found that the most important experience benchmarks for health insurance customers were quality of mobile apps and reliability of mobile apps.
Health plans wanting to retain and attract new members, especially in the younger generations, need to prioritize how they engage their patients.
"The transition to value-based care is predicated on the idea that payors and providers can drive better outcomes at a lower cost by improving patient engagement, yet many commercial health plans are having challenges getting the right information and support to patients when and where they need it," Christopher Lis, managing director, global healthcare intelligence at J.D. Power, said in a press release.
"Moreover, in patients with self-reported health status of 'poor and fair,' only 17% were assigned to a case manager. Yet for these patients with oftentimes complex health conditions, seeing multiple providers and taking several prescriptions, care fragmentation leads to poor health outcomes and higher spending in the very population that needs coordinated care the most."
Lack of data reporting means there are unanswered questions around how supplemental benefits are utilized.
Supplemental benefits are a significant differentiator between Medicare Advantage (MA) and traditional Medicare, with enrollees often opting for the private program because of its coverage for services like dental and vision.
However, how beneficiaries actually use these benefits continues to be a mystery because MA insurers do not reportthat data, leaving gaps that limit necessary assessment of the private program.
Analysis by Kaiser Family Foundation (KFF) found that most enrollees in individual MA plans have access to eye exams and/or glasses (more than 99%), hearing exams and/or aids (98%), a fitness benefit (98%), telehealth services (98%), and dental care (96%). A report from the Government Accountability Office (GAO) examined plan benefit data for 3,893 MA plans and found that all but one plan offered at least one supplemental benefit not covered under traditional Medicare, with vision and hearing being the most common at 98% and 94%, respectively.
As MA has dramatically grown in recent years, more and more money is going to MA insurers for these supplemental benefits. In the last five years, these payments have more than doubled, increasing from $1,140 per enrollee in 2018 to $2,350 per enrollee in 2023, according to KFF.
How this money is being used by payers is also difficult to understand without the aforementioned data on enrollee spending on supplemental benefits. But why is that data not available?
Though MA plans are required to submit encounter data, which includes supplemental benefits, to CMS, GAO's report uncovered that the information is limited for two reasons.
First and foremost, CMS guidance on encounter data does not specifically mention data for supplemental benefits. GAO said that according to interviewed CMS officials, the inclusion of supplemental benefits is clear. Officials from three MA organizations, on the other hand, told GAO they are not required to submit encounter data on supplemental benefits.
Additionally, CMS officials and two MA organizations told GAO there are challenges, such as there being no procedure codes for some supplemental benefits, in collecting and submitting encounter data.
HHS concurred with GAO's recommendations to clarify guidance on what encounter data submissions must include in relation to supplemental benefits and to address challenges in submitting encounter data for supplemental benefits. Until the reporting of data on supplemental benefits is fully required and enforced though, MA plans will continue operating without necessary oversight.
"Basic descriptive data could also be used to assess whether supplemental benefits are helping to address health disparities by filling specific social or medical needs, such as transportation, and whether the benefits are being targeted to those with the greatest needs," KFF wrote.
The private program has been unencumbered in its take-off and it's unclear how much upcoming CMS regulations will challenge that.
The Medicare Advantage (MA) takeover is no longer coming—it's already happened.
The private program hasn't exactly stealthily crept in like a thief in the night to become the plan of choice for seniors either. Rather, MA's growth has been impressively consistent and steady over recent years, and there's little reason to think the trend will suddenly stop.
However, speed bumps for payers may be on the way in the immediate future in the form of CMS regulations, but competition is expected to continue driving MA forward.
To better understand where MA is going though, it's necessary to understand how and why it has boomed to this point.
The new normal
For the first time ever, half of all eligible Medicare beneficiaries are now enrolled in a MA plan, according to recently released enrollment data from CMS. In 2007, less than one in five (19%) eligible Medicare beneficiaries were enrolled in the private program.
In a study published in Health Affairs, researchers from the USC Schaeffer Center found that MA added 22.2 million beneficiaries from 2006 to 2022 for a growth of 337%, all while enrollment in traditional Medicare declined by one million (-2.9%). MA penetration increased from 16.9% in 2006 to 49.9% nationally in 2022 and 24% of Medicare beneficiaries with Parts A and B lived in a county with adjusted MA penetration equal to greater than 60%.
It isn't just that MA's enrollment is going up, it's that beneficiaries are migrating over from traditional Medicare at a rapid rate. Research published in JAMA Health Forum revealed a higher rate of switching from traditional Medicare to MA than in the opposite direction from 2017 to 2020, with switching accounting for new MA enrollment growth, increasing from 49% in 2016 to 67% in 2020.
The shift has continued this year. As MA grew by a record 2.7 million members in 2023, traditional Medicare lost 1.3 million beneficiaries, according to analysis by The Chartis Group.
MA can appeal to beneficiaries in ways traditional Medicare can't, namely through it's extra benefits, such as dental and vision, and lower out-of-pocket spending. MA has also aggressively and deceptively marketed to seniors to the point it has drawn restrictions from CMS.
There's also the fact that the aging population is at an all-time high, resulting in more potential enrollees than ever. According CVS Health's recent Health Trends Report, more tan one in five people will be over the age of 65 by 2030.
"Moreover, this age group is more proactive and involved in their well-being than any previous generation, and medical advancements will continue to extend lifespans," Terri Swanson, president of Aetna Medicare, told HealthLeaders. "These factors have triggered a significant transformation in the payer market, which we have taken into account in our strategy."
Evolving to stave off stiff competition
Naturally, as MA's presence continues to expand, payers are fighting for their piece of the pie.
Most of the record MA growth this year was propelled by for-profit insurers, which accounted for 84% of the increase in enrollment, The Chartis Group's analysis found. Overall, the 10 largest for-profit insurers make up 70.6% of MA enrollment nationally, with the top five payers accounting for 67.1%.
For 2023, the typical beneficiary had a choice of 43 MA plans as an alternative to traditional Medicare, which was more than double the average number available in 2018, according to Kaiser Family Foundation.
"Companies are also diversifying their plan offerings to meet consumers' needs," Swanson said. "In short, more choices lead to intensified competition."
So how are payers thinking when it comes to differentiating themselves from the competition and ensuring that enrollment growth doesn't stagnate? Swanson outlined her and Aetna's mindset:
"To achieve continued growth, we must assess and take advantage of the available opportunities that enable us to drive better health outcomes and quality of care for our members, such as value-based care arrangements. This enables us to collaborate with our providers to promote preventive care and help our members age actively. It also means examining how and where care is being delivered and making it simpler and more convenient. For example, we recently built upon existing capabilities with new, strategic acquisitions to enhance our in-home and primary care offerings via Signify Health and Oak Street Health.
"Finally, more health care companies, like Aetna, are recognizing the influence of social determinants of health and incorporating services and benefits into their plans to address these non-medical needs. Over time, CMS introduced regulatory changes that enhance Medicare plan flexibility and help drive innovation. This has allowed us to offer our members more tailored benefits that better meet their total health needs—physical and mental—and simplify their health care journeys."
Hurting the bottom line
Payers offerings MA plans have enjoyed how the program's growth has affected their earnings, but the gains may not be the same going forward due to the changes in CMS' 2024 MA final rule.
The changes to the risk adjustment model in particular have the potential to affect insurers' pockets. Though the rule will allow the federal agency to collect billions of dollars in overpayments made to MA payers, CMS ultimately decided to phase in the risk adjustment changes over the next three years. The federal agency said MA plans will see an averagepayment increase of 3.32% due to the phase-in, instead of the 1.03% in the advance notice.
"BCBSA acknowledges the necessity of many of the updates and is appreciative of CMS' more measured approach towards implementation," Kelly Parsons, spokesperson for Blue Cross Blue Shield Association, told HealthLeaders in a statement. "However, the projected decrease in revenue for MA plans and beneficiaries could have negative downstream impacts for certain segments of MA plans and their beneficiaries, potentially making growth more challenging, particularly for smaller, regional plans in highly competitive markets."
UnitedHealth Group CEO Andrew Witty shared similar concerns in a recent investor call following the company's release of its first quarter earnings report, but stated the payer is "encouraged and optimistic" that its MA growth won't slow down.
How payers truly feel about the changes will depend on how the next year-plus plays out. Everyone will have to deal with the same regulations, but the MA market may skew even more to the giants at the top.
Even for insurers, the administrative process in the private program has drawbacks that may not be worth the cost savings.
Prior authorization, in theory, is intended to manage medical costs and promote efficient utilization of care, but the unintended consequences of the administrative process often turn it into a net negative. There's arguably no program in which the pitfalls of prior authorization are more prevalent than Medicare Advantage (MA).
Nearly all MA enrollees (99%) were in a plan in 2022 that required prior authorization for some services, according Kaiser Family Foundation (KFF), whereas beneficiaries of traditional Medicare are rarely required to receive approval.
The result? Countless prior authorization requests shot down, resulting in medically necessary being delayed or outright denied, as well as providers taking on administrative burden.
KFF analysis found that in 2021 alone, more than two million of the 35 million prior authorization requests made to MA plans were denied in full or in part. Only 11% of the denials were appealed, but when they were, 82% resulted in the denial being either fully or partially overturned, indicating that the denial was unnecessary in the first place.
Another report by the Office of Inspector General in April 2022 highlighted concerns of MA plans putting profits over patients through findings that MA organizations often delay or deny services for medically necessary care, even when prior authorization requests met coverage rules.
Though that report was released more than a year ago, a survey by the Medical Group Management Association put out just this past month revealed that little progress has been made with prior authorization in MA. In fact, based on the poll, it's gone the other way. More than four out of five (84%) surveyed medical groups said prior authorization requirements in MA increased in the past 12 months, with less than 1% reporting requirements had decreased.
The toll has affected providers' practice costs and workflow, as 77% of respondents said they had hired or redistributed staff to work on prior authorizations due to an increase in requests, while 60% said at least three different employees are involved in completing a single prior authorization request.
Prior authorization can negatively impact patients and providers, but it can also hurt payers by creating mistrust with enrollees and hindering relationships with providers. A recent survey by the American Hospital Association (AHA) found that 78% of hospital and health systems said their experience with insurers was worsening, with less than 1% saying it improved.
The scrutiny of prior authorization in MA has brought about changes by CMS, which introduced regulations in its MA 2024 final rule. Going forward, prior authorization approvals are required to remain valid for as long as medically necessary, while denials of coverage based on medical necessity must be reviewed by healthcare professionals with relevant expertise before a denial can be issued. MA plans are also required to annually review utilization management policies.
Furthermore, the rule requires that coordinated care plan prior authorization policies may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary. Coordinated care plans must also provide a minimum 90-day transition period when an enrollee underdoing treatment switches to a new MA plan, during which the new MA plan cannot require prior authorization for the active course of treatment.
The changes garnered approval by medical groups, such as the AHA, which said: "Hospitals and health systems have raised the alarm that beneficiaries enrolled in some Medicare Advantage plans are routinely experiencing inappropriate delays and denials for coverage of medically necessary care. This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained health care workforce."
Whether or not these changes are enough to ultimately fix the prior authorization issue in MA is yet to be seen, but it's a necessary and overdue step in the right direction.
Misleading marketing has run rampant in the private program for too long, though new CMS regulations will attempt to offer more protection for enrollees.
Medicare Advantage (MA) can attribute its growth to several factors, but deceptive marketing is undeniably somewhere on that list.
When your consumer base is senior citizens, the ease with which MA and traditional Medicare can be confused isn't a bug, it's a feature. Health plans selling the private program are able to take advantage of beneficiaries' confusion with marketing tactics that prioritize profits over well-being.
Whether it's a celebrity endorsing MA on a TV advertisement or a broker not being completely forthcoming, MA has been ripe with misleading and deceptive practices.
Where exactly is that marketing coming from and what is being done to protect enrollees?
According to a recent reportfrom the Commonwealth Fund, non-government entities—agents, brokers, partners, and health plans—account for one-third of all Medicare-related search records and 87% of all search engine ads.
"Medicare Advantage plans are promoted through direct mailings, telemarketing, and advertising on radio, television, websites, and social media channels," the report stated. "No organization, including the federal government, directly 'markets' traditional Medicare, although commercial insurers sell supplemental Medigap and Part D plans for people in traditional Medicare. Thus, nearly all beneficiaries are subject to some form of marketing effort."
When people aged 65 or older sought help with their plan choice, the analysis found that 31% turned to agents and brokers in MA. As brokers and agents are paid commission by insurers, enrollees can be at risk of manipulation.
The Commonwealth Fund also highlighted that CMS reported more than 41,000 complaints in 2021 about Medicare private plan marketing, which was double the number in 2020 and up from about 6,000 in 2017.
The marketing problem has gotten out of hand, which is why plenty of lawmakers have taken notice and attempted to push CMS to implement necessary regulations.
CMS listened and cracked down on unscrupulous marketing tactics in its MA 2024 final rule. The changes will take effect on September 30, before the open enrollment period when plans will once again attempt to lure beneficiaries through TV ads and other media.
Prohibit any ads that do not mention a plan name, use words and imagery that could confuse enrollees, or use Medicare logos in a misleading manner.
Protect beneficiaries from prevent predatory behavior and strengthen the role of plans in monitoring agent and broker activity.
Protect enrollees by ensuring they receive accurate information about Medicare coverage and are aware of how to access accurate information from other sources.
"This final rule will strengthen Medicare Advantage and hold health insurance companies to higher standards for America’s seniors and people with disabilities by cracking down on misleading marketing schemes by Medicare Advantage plans, Part D plans and their downstream entities," CMS said in a press release.