The Medicare program represents a sacred promise to America’s elderly and disabled citizens. The Medicare Fee-For-Service (FFS) program, introduced as part of the Great Society in 1965 to mirror a Blue Cross Blue Shield commercial market standard, covered hospital and physician benefits separately. As the private health care market evolved, policymakers introduced private plans into Medicare, followed by the Medicare Risk Program and the integration of health maintenance organizations, eventually leading to today’s Medicare Advantage (MA) program.

This article addresses the history of the Medicare program and the current debate around the recent MedPAC estimate of MA overpayments. We propose nuanced analytical considerations to ensure accurate coding, address favorable selection, and foster a holistic policy future for Medicare.

A Program In Evolution Since 1965

With the intent to create a program serving the changing needs of beneficiaries, various administrations and Congresses oversaw the design of benefits, addressing evolving medical practice and patient complexity. In the 1950s, hypertension was only newly being treated, with national treatment guidelines first issued in the 1970s. Powered by epidemiological research and pharmaceutical innovation, prescription drugs became a norm within medical practice, and, by 1986, 84.7 percent of Medicare HMO enrollees received prescription drug benefits. Driven by an increasingly diverse population, policymakers and analysts recognized the programmatic agility of MA, which, for example, allowed benefit design that better served beneficiaries in long-term care and provided home and team-based care for multi-morbid individuals.

Recognizing that customization—not standardization—coupled with plan quality transparency was critical to caring for an increasingly diverse population, policymakers created special needs plans and later added a quality star rating system to grade MA plans as part of the Patient Protection and Affordable Care Act. Subsequently, regulators have worked to improve ratings accuracy in response to analytical concerns. Given that the star rating quality bonus system does not apply to FFS Medicare, quality bonus incentives thus financially favor the MA program, the FFS Medicare plan lacks a quality rating, and beneficiaries cannot easily compare the two formulations of Medicare.

Simultaneous fiscal pressures drove commercial insurers to implement cost-control strategies via networks, utilization review, and employee cost shifting. States and the federal government faced similar pressures, motivating the evolution of FFS payment to risk-adjusted capitation as part of the volume-to-value transition supported across Democratic and Republican administrations.

Facing the pressures of fixed incomes and limited finances, just over half of all seniors today elect MA with its financial protections and enhanced benefits. The FFS program has become increasingly expensive for beneficiaries via premiums for Part B, Part D, and Medigap (exceeding $183 monthly); MA has become an appealing alternative by serving as an affordable Medigap plan coupled with no-cost or low-cost Part D coverage.

Recent Policy Questions And The Need For Analytical Rigor

With over 30 million elderly, disabled, and impoverished Americans turning to MA, analytical rigor in assessing MA’s value and performance compared to FFS Medicare is an absolute requirement. Analyses must integrate insights and data across academia, the policy community, government, and industry, all aimed at equalizing the evaluation and treatment of MA and FFS Medicare. This section responds to MedPAC’s recent analysis claiming $83 billion in MA overpayments as a result of greater coding intensity in, and favorable selection into, MA.

Coding Intensity Differences

While MA plans are likely overfunded, approaches to developing estimates of coding intensity and favorable selection must validate policy models by connecting them to real-world business and clinical operations. Coding intensity differences, a longstanding MedPAC concern, derive from different payment methodologies in FFS Medicare versus MA. In FFS Medicare, specific providers are paid based on relative value units while hospitals are paid based on diagnosis-related groups (DRGs). In FFS, providers are not incented to capture all diagnosis codes that accurately reflect a member’s health condition. In MA, health plans are paid on a per-member, per-month base capitation rate, risk-adjusted for health status. This incents MA plans to more accurately code disease prevalence, incidence, acuity, and complications.

Such differing incentives create problems when policy experts seek to do programmatic comparisons between FFS Medicare and MA. These coding intensity differentials stem from three potential components. First, outright fraudulent coding remains a concern given ongoing cases of plans adding diagnoses unsupported by medical documentation. A second, related concern is diagnostic upcoding, wherein complexity is falsely enhanced to drive payment. The third component is clinically appropriate diagnostic coding intensity, the reciprocal of FFS undercoding.

Regarding the third component, consider the case of a Medicare beneficiary with diabetes and cardiac, renal, and ophthalmic complications. In FFS Medicare, physicians and hospitals may capture only a portion of these diagnoses to justify the provision of a specific service. In contrast, an MA plan that bears full underwriting risk has an incentive to capture all of these diagnoses as a means of assessing the full cost to cover all beneficiary benefits. In this setting, policymakers must address chronic FFS undercoding, a problem acknowledged but not yet measured and accounted for in the MedPAC analysis of FFS versus MA spending.

While the first two examples of coding intensity differences represent MA plan “overpayment” in the sense that people normally use that word, the third—clinically appropriate coding—does not. Stringent CMS regulations and Medicare Risk Adjustment Data Validation (RADV) audits would greatly minimize the first two components. The recent MedPAC analysis of coding intensity in MA does not differentiate between, measure, or account for these three factors driving coding intensity. Thus, with FFS undercoding unaccounted for and the three components of coding intensity all lumped together as overpayment, the MedPAC analysis likely overestimates coding intensity effects.

With an eye towards solving problems and improving measurement, policymakers and regulators should measure all components of coding intensity via chart audits comparing large samples of FFS and MA beneficiaries, using them to address overpayment. Other drivers of policy consternation, like in-home health risk assessments, pose a regulatory opportunity to require two years of data as MedPAC recommended and go a step further by transforming what is functionally a data-harvesting visit into a meaningful, more convenient clinical encounter for elderly or disabled beneficiaries. CMS has begun to address challenges in MA coding through an appropriately muscular approach to implementing RADV audits, updating Medical Loss Ratio guidance, and attempting to target problematic coding practices.

Favorable Selection

Finally, favorable selection within the MA program has been a longstanding concern. Historically, bad actors have engaged in tactics ranging from deterring sicker beneficiaries through third-story sales seminars to targeted advertising designed to drive healthier enrollment. This has inspired enhanced oversight and a series of regulator- and policymaker-driven reforms: CMS designed policy interventions to address real-world market problems and now reviews all plan marketing materials, operationalizing existing regulations regularly updated through marketing guidelines.

MedPAC’s recent updated estimate of MA favorable selection violates several analytical norms, including the use of a non-peer-reviewed comparator model and the inclusion of beneficiaries enrolled in employer-group waiver plans (EGWPs). EGWPs are not available to the general public and are not subject to CMS plan bidding requirements for MA and prescription drug benefits.

In addition, for unclear reasons, MedPAC’s recent model excludes beneficiaries with end-stage renal disease (ESRD), despite MA penetration of ESRD Medicare beneficiaries rising from 27 percent in 2020 to 47 percent in 2022, nearly approaching the MA general market share of 51 percent. While there is undoubtedly health status variation among ESRD beneficiaries, caring for this population is generally costly, with evidence suggesting that the MA’s required maximum out-of-pocket benefit is highly attractive to many ESRD Medicare beneficiaries—resulting in likely negative selection for MA plans. Furthermore, growing MA enrollment in D-SNPs—special needs plans for beneficiaries who are dually eligible for Medicare and Medicaid, another high-cost population—and the Medicare trustees report denoting decreasing FFS costs per beneficiary due to this trend raise questions about the real-world validity of the recent MedPAC favorable selection model.

While invariably there is some favorable selection in MA, the program’s integrated benefits likely result in negative selection into the program. For example, a Wakely report concludes that, if the mandatory MA maximum out-of-pocket (MOOP) limit of $7,550 were included in FFS Medicare, FFS spending would be 2.8 percent higher. A desire for a MOOP limit likely drives some high-cost beneficiaries into MA, but this factor is unaccounted for in MedPAC’s recent program comparison methodologies, which thus likely overestimate the effect of favorable selection.

To ensure accurate measurement of favorable selection across FFS Medicare and MA, selection effects must be examined bidirectionally. As the example of ESRD beneficiaries demonstrates, models, including MedPAC’s, must undergo stress-testing with subsets of Medicare populations in order to ensure internal validity. Finally, MedPAC’s model and other models must be externally validated by connecting them to real-world business practices. As the historical and recent actions of CMS’ work to address favorable selection demonstrate, externally validating models in this fashion guides policymakers and regulators to focus regulatory policy on issues that harm Medicare beneficiaries.

Considerations For Future Analytical Work And Program Policy

While it is clear that MedPAC’s new model is incomplete and likely overestimates coding intensity and favorable selection effects through unaddressed analytical questions, the model also fails to distinguish overpayment from differential payment. Given a purported overpayment of $83 billion for beneficiaries enrolled in MA versus FFS, if that entire amount represented plan profit, UnitedHealthcare and Humana, representing nearly 47 percent of enrollees, would presumably reap $39 billion/year in excess spending. However, Humana reported $102.6 billion in annual revenues and $4.3 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) across all insurance lines for 2023; UnitedHealth Group reported annual revenue of $372 billion with $32 billion in EBITDA. Thus, the $39 billion in excess spending would represent more than the two companies’ combined pre-tax income across all lines of insurance business, suggesting that the health plans are losing money on their remaining lines of business—an unlikely scenario.

Just as not all differential payment is overpayment, neither is all differential payment contributing to plan profits. In fact, MA uses $2,328 in rebates per beneficiary annually to deliver additional benefits, meaning $69.8 billion (84 percent) of purported overpayments go toward reduced A/B cost-sharing, premium reductions, a prescription drug plan, and other supplemental benefits. MA thus attracts beneficiaries who are unwilling or, more worrisome, unable to purchase Medigap plans. Consequently, blind cuts in MA, versus targeted policy improvements that equalize the treatment of MA and FFS, would hurt the many poor and minority beneficiaries in the program and damage long-standing efforts to improve health equity.

Instead, future policy analyses of MA and FFS spending must be holistic. In addition to analyzing statutory program spending, analysts must consider component-by-component costs and the cost to both taxpayers and beneficiaries for the construction of a holistic health benefit package in both the FFS and MA programs. This could include analysis of taxpayer/beneficiary costs and induced demand as MA plans buy down Parts A and B beneficiary cost-sharing versus the much greater induced demand from FFS beneficiaries with Medigap, as nearly three-quarters of beneficiaries with Medigap are without any cost sharing.

Policymakers should also look to equalize the treatment of MA and FFS Medicare, promote value-based care, and differentiate between good and bad actors. If policymakers are concerned that MA is coded differently than FFS, regulators should look to improve coding accuracy for both programs. Solutions could include using artificial intelligence to crawl charts as a means of equalizing payment. In conjunction, policymakers could budget for thorough chart audits of FFS and MA populations to better measure differential coding. Other policies could include promoting site-neutral payments, competitive telehealth pricing, and tech-assisted and tech-driven solutions that reduce cost and expand access.

If MA program spending driven by inflated, formulaic benchmarks is a primary concern, policymakers could also consider staged reforms to Medigap plans, long a focus for programmatic reform; they could address the previously mentioned induced demand in FFS Medicare, driven by a lack of cost sharing created by Medigap, through the implementation of value-based insurance design in Medigap plans. Other policy alternatives worth exploring include larger geographies for plan bidding or benchmark reform through competitive bidding inclusive of FFS Medicare, with rigorous consumer protections such as grandfathering and risk corridors to protect vulnerable beneficiaries. To combat overpayments due to star ratings, policymakers and regulators could eliminate double-bonus counties (counties with high MA penetration and low FFS Medicare spending receive double bonuses) and steward the creation of a uniform quality ratings program for both FFS and MA.

To address high drug costs, regulators could mirror best practices in Medicaid and use managed care tools to implement value-based contracting for revolutionary new therapies. To better support consumers, regulators should improve the plan finder to help provide beneficiaries with more transparent cost and benefits information. Finally, with an increasingly complex Medicare population and changing delivery system, policymakers should support a diversity of beneficiaries through modernization and mass customization versus product or benefit standardization.

Indiscriminate, across-the-board program cuts would harm the millions of elderly and poor beneficiaries enrolled in MA. Policymakers should undertake a “measure twice, cut once” ethos, internalizing consumer protection as a core principle. Creative, contemporary policy solutions that preserve the strengths and minimize the weaknesses of the MA program should be coupled with simultaneous improvements to FFS Medicare, as the two programs are inextricably linked. While MA is imperfect, population-based payment provides the flexibility to meet the varying needs of America’s increasingly diverse population while creating a long-term framework for continuing the transition from volume to value.

Authors' Note

We would like to acknowledge the years of hard work on implementing and improving the Medicare Advantage and Part D Prescription drug programs by Jeffrey Kelman, MD, MMSc, the former Chief Medical Officer of CMS whose curiosity and skepticism inspired us all.

Kenny Kan is Chief Actuary of Horizon BCBS, which operates MA plans. The views expressed are the authors’ own and not necessarily those of their employers or affiliations.

Senate Finance Committee Chair Ron Wyden, D-Ore., and Ranking Member Mike Crapo, R-Idaho, released a white paper May 17 outlining policy concepts regarding pay reform for Medicare physicians. The paper highlights areas that could undergo reform, including: creating sustainable payment updates to ensure clinicians can own and operate their practices; incentivizing alternative payment models that reward better care provided at a lower cost; how Medicare measures quality care; improving primary care; supporting chronic care benefits in Medicare fee-for-service; and ensuring continued telehealth access.

Click here to view the white paper: https://www.finance.senate.gov/imo/media/doc/051723_phys_payment_cc_white_paper.pdf

Medicare Advantage is the dominant form of Medicare, and questions loom for payers, providers and policymakers alike in the year ahead.

Enrollment in the program has doubled in the last 10 years, and over half of Medicare beneficiaries are enrolled in an MA plan in 2024. At the same time, a number of headwinds are converging on MA this year.

The public-private partnership is a major income generator for insurers, but as CMS tightens reimbursements, and audits and medical costs rise, it may not be the cash cow it once was. On top of this, many hospitals are fed up with Medicare Advantage. Several hospital executives have spoken out against delayed and denied payments from Medicare Advantage insurers, and some have even gone as far as to tell their patients to avoid the plans altogether.

Still, the program is as popular as it's ever been among beneficiaries. How the future shapes up for Medicare Advantage — and Medicare as a whole — depends on how providers, insurers and lawmakers act on key issues facing the program.

Here are 10 key questions for the future of Medicare Advantage:

1. How long will hospitals put up with denied payments?

A growing chorus of hospital leaders have criticized Medicare Advantage plans, often citing problems with denied care and delayed payments.

In September 2023, San Diego-based Scripps Health dropped all Medicare Advantage contracts, a move affecting 30,000 older adults. Scripps is one of the largest health systems to stop doing business with MA entirely.

"It's become a game of delay, deny and not pay,'' Scripps Health CEO Chris Van Gorder previously told Becker's. "Providers are going to have to get out of full-risk capitation because it just doesn't work — we're the bottom of the food chain, and the food chain is not being fed."

In the second half of 2023, at least 15 hospitals and health systems moved to drop some or all Medicare Advantage plans. Though a small portion of hospitals are done with MA altogether, many others are raising complaints, saying payment delays and denials from the plans are getting worse.

A survey published in April by the Healthcare Financial Management Association and Eliciting Insights found 62% of hospitals CFOs surveyed said collecting payments from MA plans is "significantly more difficult" than it was 2 years ago.

2. What other options do hospitals have?

While a few hospitals are dropping the program, Medicare Advantage enrollees now account for more than half of Medicare beneficiaries — meaning it's not feasible for most hospitals to cut ties with MA completely. Rates of Medicare Advantage enrollment vary widely by county and state, but for many hospitals, going out-of-network with all MA plans would mean losing a significant portion of patients.

Bristol (Conn.) Health CEO Kurt Barwis said delayed payments from Medicare Advantage plans were a major factor behind the system's workforce reduction. In March, Bristol Health announced it would cut 60 positions across departments, 21 of which were occupied. Over 60% of the system's Medicare patients are enrolled in MA, Mr. Barwis told Becker's, making it clear that dropping MA plans is not on the table.

"The reason it's not an option is I have an older community, and they need care," Mr. Barwis said. "If you look at the rules, and the disruption it would cause in the community, I'm not sure I can face the community if I was to use that as one of my approaches."

Hospitals have tried other approaches to address their Medicare Advantage pain points without cutting ties with plans completely. Some have opted to pare down the number of insurers they contract with to the ones that best align with their financial goals.

Will Bryant, CFO of Chapel Hill, N.C.-based UNC Health told Becker's the system will pick a few Medicare Advantage payers to work with moving forward, prioritizing "the partners who act like partners" and do not "deny care in order to bolster their billions of dollars of quarterly earnings." He said he expects many other health systems to do the same.

Some hospitals are opting to create their own Medicare Advantage plans. Morgantown, W.Va.-based WVU Medicine is a majority owner of Peak Advantage, a health plan that launched in 2021 with two other West Virginia health systems as co-owners and expanded into Medicare Advantage at the start of 2024.

WVU Medicine launched Peak Medicine in 2021, and began offering plans to its employees in 2023. It expanded to Medicare Advantage at the beginning of 2024.

Albert Wright Jr., president and CEO of West Virginia University Health System, told Becker's that ownership of the plan has resulted in a "true mindset change" for the organization.

"You start to think about everything you do as both the payer, provider," Mr. Wright said.

Peak Health should feel like the easiest Medicare Advantage plan for WVU physicians to work with, Mr. Wright said. The system has not dropped any external Medicare Advantage plans, but may pare back the number of plans it works with over time.

"We probably want to work with three or four that we have good, agreed-upon relationships with," Mr. Wright said.

3. What is the future of prior authorization?

As complaints about delayed and denied Medicare Advantage payments intensify, CMS has taken action on prior authorization.

In 2021, more than 35 million prior authorization requests were submitted on behalf of MA enrollees, according to KFF. Rates of prior authorization requests vary widely between insurers, from 2.9 requests per enrollees in Anthem plans, to 0.8 requests per enrollees in Kaiser Permanente plans. On average, 11% of prior authorization requests were denied by MA plans in 2023.

New regulations took effect at the start of 2024, clarifying MA plans must follow coverage guidelines set by traditional Medicare. If there are not clear guidelines for services covered by traditional Medicare, MA plans can develop their own internal guidelines, based on widely used clinical guidelines, that must be publicly accessible. The rule also prevents plans from imposing any prior authorization requirements in the first 90 days a member is enrolled.

In alignment with these regulations, CMS took further action in February and issued guidance to Medicare Advantage plans around the use of AI and prior authorization. MA plans can use algorithms to support coverage decisions, but any algorithm or AI-based tool must be compliant with the agency's coverage decision requirements. Algorithms can be used only to help predict length of stay for post-acute services and not as the basis for terminating coverage, CMS said.

The guidance follows controversy and questions about the adoption of AI in health insurance decision-making. In 2023, three major insurers — UnitedHealthcare, Humana and Cigna — faced lawsuits alleging they used AI or automated algorithms to wrongfully deny members care. At the time of this article's publication, the lawsuits are ongoing. Some lawmakers have expressed concern CMS's guidance around AI does not go far enough.

Even after enactment of the new prior authorization regulations at the start of 2024, hospitals have asked CMS to do more with health insurers that make it less cumbersome to collect payment for services. In March, over 100 hospitals and health systems signed onto a letter asking the agency to do more on Medicare Advantage denials. The providers requested CMS collect more data on claims denied by Medicare Advantage plans and take enforcement action against plans not following the coverage rules set out by Medicare. The systems also asked CMS to bar MA plans from delaying or denying claims approved through electronic prior authorization.

4. How will the two-midnight rule shake up hospitals' relationship with MA?

New regulations took effect at the beginning of 2024 that could increase the reimbursement hospitals receive from MA plans, but present challenges for how hospitals document inpatient care.

The rule specifies plans must provide coverage for an inpatient admission when the admitting physician expects the patient to require hospital care for at least two midnights. The rule means hospitals need to up their documentation of patient stays, Ronald Hirsch, MD, vice president of regulations and education group at R1 Physician Advisory Services, told Becker's in June.

"MA plans are theoretically going to have to pay for a lot more inpatient admissions, so they're going to audit a lot more," Dr. Hirsch said.

On an April 26 call with investors, HCA Healthcare CFO Bill Rutherford said the rule seems to be having a "moderate benefit" on the health system's inpatient volume. Other hospital executives have said the rule has had little effect on inpatient volumes or revenue.

5. Has MA lost its luster for insurers?

While hospitals' frustrations with MA grow, insurers are facing another set of challenges in the program, which no longer promises the same level of profitability it once did for for-profit insurers.

In January, Moody's analysts wrote that the program "seems to be losing some of its luster." According to Moody's, earnings in Medicare Advantage shrunk by 2.1% from 2019 to 2022, despite premiums and membership growing by 40% in the same time period.

In the second half of 2023 and early months of 2024, insurers warned of rapidly rising costs among the Medicare Advantage population, driven in part by pent-up demand from the COVID-19 pandemic. Humana, the second-largest Medicare Advantage insurer, reported a $541 million loss in the fourth quarter of 2023, driven by what executives called unprecedented increases in medical costs.

With headwinds in the Medicare Advantage market, Moody's noted Elevance Health and Cigna, which have a smaller portion of their business in Medicare Advantage, are becoming more attractive to investors. Cigna finalized a deal to sell its Medicare Advantage business to Health Care Service Corp. for $3.3 billion in January.

In May, CVS Health executives said they expected the MA business to lose money in 2024, and braced for a decline in members in 2025. Still, the company remains bullish on the long-term outlook for MA.

"The current environment does not diminish our opportunities, our enthusiasm, or the long-term earnings power of our company," CVS Health CEO Karen Lynch said in May. "We are confident that we have a pathway to address our near-term Medicare Advantage challenges."

6. Will MA benefits be cut back?

Though some challenges around costs appeared to abate in the early months of 2024, insurers are also facing a tougher rate environment from CMS. In April, the agency finalized rules that would trim benchmark payments.

Benchmark payments are the amounts CMS pays MA plans per beneficiary. In addition to the cut, the agency is phasing-in risk-adjustment coding changes from 2024 to 2026. Insurers have argued the changes amount to a cut in payments for Medicare Advantage.

In response to the government's rate changes, many major Medicare Advantage insurers have indicated they will cut supplemental benefits, increase premiums for Medicare Advantage beneficiaries, or pull back from certain markets to account for the tougher funding environment. Humana executives said in an April 24 call with investors that it is eyeing exiting certain markets in response to the CMS rates, for example.

Scott Ellsworth, founder and president at Ellsworth Consulting, told Becker's that 2024 marks a turning point, in that older adults have seen benefits in MA get better every year until now.

"Now we're at an inflection point and the free lunch is over," he said. "There is going to be a sharing of the pain. Providers have disproportionately shared the pain, and now you're seeing many of them say, 'Enough is enough, we're out.'"

7. Are supplemental benefits working?

Virtually all Medicare Advantage plans offer hearing, vision and dental benefits — coverage not included in traditional Medicare, according to KFF. Many also offer over-the-counter drug benefits, meal support and reduced cost-sharing compared to traditional Medicare plans.

While the offering of such benefits are widespread, utilization of them is less clear. CMS lacks data on how often supplemental benefits are used in the program, according to a 2023 report from the Government Accountability Office. In January, CMS issued a request for comments on improving transparency in the program, including greater data collection on supplemental benefit use.

Supplemental benefits are one draw for beneficiaries to join MA. Medicare Advantage may also cost less than other coverage options. Given that nearly all traditional Medicare beneficiaries rely on supplemental coverage to address out-of-pocket expenses not covered by the traditional Medicare program, the appeal of MA's supplemental benefits and cost-effectiveness becomes increasingly apparent.

One proposed solution to problems plaguing Medicare Advantage is to make traditional Medicare benefits on par with MA, Don Berwick, MD, who served as CMS administrator during the Obama administration and is a current health policy lecturer at Harvard Medical School in Boston, told Becker's.

The idea has gained and lost steam in Congress. Bipartisan legislation to add dental, vision and hearing benefits to original Medicare coverage was introduced in 2023, but stalled.

"It should be cost neutral to beneficiaries as to which they choose," Dr. Berwick said. "The money needed to improve traditional Medicare would be readily accessible by clawing back the excess subsidies that have accumulated for Medicare Advantage."

8. Can CMS curb overpayments?

The government spends more on Medicare Advantage beneficiaries than comparable enrollees in fee-for-service Medicare, according to the Medicare Payment and Advisory Commission.

Two factors account for this disparity, according to MedPAC, which advises the U.S. government on Medicare. The first is favorable selection. Medicare beneficiaries who use fewer healthcare services tend to self-select into MA plans. The second factor driving disparities is coding intensity. Medicare Advantage plans are paid based on beneficiaries' risk, so plans are incentivized to document more diagnoses in patients' records.

In 2024, the federal government will spend $83 billion more on Medicare Advantage beneficiaries than if they were enrolled in fee-for-service Medicare, according to MedPAC. The commission also estimated MA will increase Medicare premium costs by $13 billion in 2024.

Insurers decried MedPAC's estimate, which industry groups said did not account for differences between the fee-for-service and Medicare Advantage population. Mike Tuffin, CEO of industry group AHIP, said the estimates are based on "speculative assumptions" and "overlook basic facts about who Medicare Advantage serves and the value the program provides."

MedPAC also estimates that coding intensity will be 20% higher in Medicare Advantage than in fee-for-service in 2024.

An October 2022 report from The New York Times found nearly every major insurer has been accused of fraud by a whistleblower or by the federal government.

In addition to higher coding intensity, the federal government has investigated several payers for intentional upcoding — making patients appear sicker than they are on paper to receive more reimbursement from the government.

In October 2023, Cigna agreed to pay $172.3 million to resolve allegations it violated the False Claims Act by submitting incorrect Medicare Advantage patient data to CMS to receive higher reimbursements.

Other insurers, including UnitedHealthcare and Elevance Health have faced similar allegations.

CMS is also toughening its audits of overpayments. In January 2023, the agency finalized a rule that will allow it to recoup more dollars from Medicare Advantage plans through audits. CMS estimates it could collect $650 million in clawbacks in the first three years the rule is in effect and $400 million each year after. The rule is being challenged in court.

9. Does MA deliver better outcomes?

Medicare Advantage has yet to deliver on yield savings for the government, and evidence is inconclusive as to whether the program is tied to superior outcomes and care.

Medicare Advantage and traditional Medicare are mostly the same when it comes to outcomes, according to a 2022 literature review from KFF. Neither program consistently outperformed the other on quality outcomes across 62 studies reviewed.

MA enrollees were more likely to report having a usual source of care and receive preventive wellness services. Traditional Medicare enrollees with supplemental coverage were the least likely to report cost-related problems, according to KFF, but traditional Medicare enrollees with no supplemental coverage were most likely to report an issue affording care.

Medicare Advantage beneficiaries may spend less overall on their healthcare costs than their counterparts in traditional Medicare. Fee-for-service Medicare members spend about 7% more on average for healthcare compared to Medicare Advantage members, according to a 2023 study published by AHIP.

10. What's the future of traditional Medicare?

Despite the challenges, Medicare Advantage is set to keep growing.

The Medicare Advantage program has ballooned from 14 million enrollees in 2013 to 31 million in 2023. Continued growth of the program is expected, according to estimates from KFF. Six in 10 Medicare beneficiaries are expected to be enrolled in an MA plan by 2030.

Medicare Advantage and traditional Medicare beneficiaries generally express high-levels of satisfaction with their care, with few major differences between the programs, according to KFF.

If Medicare Advantage keeps growing, and beneficiaries remain satisfied with their coverage, what's the future outlook for traditional Medicare?

CMS Administrator Chiquita Brooks-LaSure said it's "critical" that beneficiaries continue to have a choice between traditional Medicare and Medicare Advantage.

Michael Chernew, PhD, chair of the Medicare Payment Advisory Commission, said although MA was not designed to be the dominant form of Medicare, its growth reflects the value beneficiaries are getting from the program.

"That said, I think the trajectory of growing enrollment we're on is unstable, for a bunch of reasons that are sometimes mathematical, just the way that the benchmarks are set," Dr. Chernew said in January.

MedPAC has proposed several policy items the commission says will slow spending in Medicare Advantage, including overhauling the way CMS calculates its payments to MA plans to make them closer to fee-for-service rates.

One possibility is that, at this rate of enrollment, traditional Medicare could "be atrophied significantly," in the years ahead, Dr. Berwick told Becker's. In this scenario, only the patients most undesirable to MA insurers could be enrolled in traditional Medicare.

"The benchmarks for Medicare Advantage are basically based on the expense pattern of traditional Medicare, so the whole financing calculation system is put in jeopardy by the dominance of Medicare Advantage," he said. "I would like to see Medicare Advantage slowed or stopped right now, or at least forced to have better carriers."

Medicare Advantage patients might be in for a rude awakening as CVS plans to get rid of 10 percent of its plans.

CVS Health made the decision to cut the Aetna health insurance plans in an effort to prioritize profit margins, company leaders revealed this week.

"The goal next year is margin over membership," CFO Thomas Cowhey said. "Could we lose up to 10% of our existing Medicare members? It's entirely possible. And that's okay, because we need to get this business back on track."

After releasing the company's first-quarter earnings, CVS was $900 million below its health care benefit predictions on medical costs, with $400 million lost due to heavy outpatient service utilization.

Currently, CVS is the third largest Medicare Advantage insurer in the country, with the company saying it had 4.2 million enrollees as of April. If 10 percent of its current plans are exited, that would leave 420,000 beneficiaries needing to switch to a different plan or go without coverage.

"With rising medical costs outpacing government reimbursement increases, CVS is prioritizing profit margins over membership growth for its Medicare Advantage plans. However, this strategy could impact benefits and plan availability for many retirees," Michael Ryan, a finance expert and founder of michaelryanmoney.com, told Newsweek.

Earlier this year, the Biden administration said it would be cutting next year's payments to Medicare Advantage plans by 0.16 percent, adding onto the financial pressure CVS and other insurers are feeling at the national level.

Ryan said the decision to cut plans is logical as medical costs keep climbing and seniors seek out more care than years previous as more Baby Boomers retire. At the same time, 2025 Medicare Advantage payment rates do not look like they will cover the increasing expenses.

"CVS has bluntly said the new rates are insufficient 'to cover overall cost trends,'" Ryan said. "So they're taking steps to recover profit margins, targeting a 4-5 percent margin for their Medicare plans by 2025."

Insurers often first target supplemental benefits like fitness memberships and over-the-counter medication allowances, so CVS is likely to look at those first. However, some counties might be axed altogether if they can't be profitable, Ryan said.

"And we can't rule out premium increases to make the numbers work," he said.

Still, if CVS wants to be sustainable in the long run, it will need to still be able to retain and attract new members.

"I don't think CVS wants to gut their Medicare Advantage plans to the point of being uncompetitive," Ryan said. "They're banking on efforts to better capture members' health conditions and boost risk-adjusted reimbursement rates down the line. Insurers have to continually re-evaluate and rebalance their models as medical inflation, regulations, and reimbursement rates shift."

One in five women experience mental health and substance use problems during pregnancy and the postpartum period, a member of the Task Force on Maternal Mental Health said during a briefing hosted by HHS on Tuesday to mark the launch of the National Strategy to Improve Maternal Mental Health Care.opens in a new tab or window

Sharing her own story, Nicole Barnett, MSW, a member of the Task Force, said something felt different after the birth of her third and youngest child. When she described her symptoms to a nurse at her obstetrician's office and was told she might have postpartum depression, she said that she could not accept it.

"I did not want to hear the phrase 'postpartum depression,'" she said, noting that, for her, it meant failing at motherhood.

Barnett refused to seek help or take medication, and her symptoms worsened. Washing her face became a chore. Decisions as immaterial as what color folder to send her kindergartener to school with could trigger a full-blown panic attack.

At her worst, Barnett said she would fence herself off with her children behind a baby gate in a back room. "I'd give my older two something to play with, and just hold my baby in the rocking chair and just pray for my husband to get home."

Ultimately, the fear that she might be neglecting her children drove Barnett to seek help. Within weeks of starting on medication, she began to feel more like herself. She connected with a therapist and joined a support group for mothers, which she credits as most important to her recovery.

For the last 20 years, Barnett has worked in maternal mental health education and advocacy, including serving as a counselor for the Health Resources and Services Administration's National Maternal Mental Health Hotline.opens in a new tab or window

"Every day I get to help women just like me," she noted.

The Task Force on Maternal Mental Health, which is co-chaired by Admiral Rachel Levine, MD, the HHS Assistant Secretary for Health, and Miriam Delphin-Rittmon, PhD, the HHS Assistant Secretary for Mental Health and Substance Use, is a product of the TRIUMPH for New Moms Actopens in a new tab or window.

During the briefing, Levine said that maternal mental health issues and substance use disorders (SUDs) are the leading causes of pregnancy-related deaths in the U.S. Furthermore, pregnant women with mental health conditions are 50% more likely to experience severe maternal morbidity.

To address this crisis, the Task Force conducted a literature review, held listening sessions to gain input from stakeholders, and gathered public comments through a request for information. Five working groups met online dozens of times from November 2023 through April to gather their findings and develop the following five core recommendations:

• Build a national infrastructure that prioritizes perinatal mental health and well-being: Develop and strengthen federal policies to promote perinatal mental health and well-being by reducing disparities and expanding care models in which perinatal care, mental health care, and SUD care are integrated.
• Make care and services accessible, affordable, and equitable: Establish federal mechanisms to fund infrastructure to support new delivery models for mental health conditions, SUDs, and gender-based violence. Implement "culturally relevant and trauma-informed clinical screening" and focus on training, growing, and diversifying the perinatal mental health workforce.
• Use data and research to improve outcomes and accountability: Fund and expand support for perinatal quality collaboratives (PQCs) in all 50 states, the District of Columbia, and U.S. territories. (The CDC currently supports PQCs in 36 states.) Establish a central clearinghouse of information to make it easier for providers and other stakeholders to locate resources for perinatal health data.
• Promote prevention, and engage, educate, and partner with communities: Fund evidence-based best practices to support "person-centered, culturally relevant, and community-level detection and prevention of perinatal mental health conditions and SUDs," particularly in under-resourced communities.
• Lift up lived experiences: Listen to the perspectives of people with lived experiences of maternal mental health problems and respond to their needs.

The Task Force's report explains how the lack of national infrastructure for maternal mental health care and other systemic barriers place unnecessary stress on pregnant and postpartum women. A shortage and "geographic maldistribution" of mental health and SUD providers compounds these problems.

Those most vulnerable to mental health problems and SUDs include those from under-resourced racial and ethnic groups; incarcerated persons; parents of children in the neonatal intensive care unit; those who have experienced pregnancy loss, forcible displacement, trafficking, and gender-based violence; veterans; and those with pre-existing mental or behavioral health conditions.

During interviews, women with lived experiences shared the changes that would have improved their situation during pregnancy, including opportunities to connect with experienced mothers, access to high-quality care, sleep strategies and support, information about available medications, and specialty training in perinatal mental health support for members of the workforce from under-resourced communities.

A key recommendation of the report was the call to enact paid family leave, specifically to support the House Bipartisan Paid Family Leave Working Groupopens in a new tab or window, which launched in January 2023 and calls for at least 6 months of guaranteed leave in every state, U.S. territory, and the District of Columbia.

In interviews, many mothers reported having to return to work after only a few weeks when their babies were still vulnerable and they were still healing, said Task Force member Maya Mechenbier, JD.

"The mental health impact of having to leave your baby and return to work before you're ready cannot be overstated," she said.

Link to task force website: https://www.womenshealth.gov/about-us/what-we-do/working-groups-and-committees/task-force-on-maternal-mental-health

Overdose deaths tragically rose during the COVID-19 pandemic, sparking renewed calls for awareness of substance use disorders and access to treatment.

The once-in-a-century global health crisis had widespread impacts on physical and mental health and coincided with America's worsening fentanyl epidemic. And though calls have been made to expand access to treatment, people with substance use disorders often face barriers to getting the help they need to survive addiction to deadly substances like opioids.

Stigmatization of these disorders, a lack of capacity at treatment centers where waitlists are common, and unaffordability of treatment present some of the most critical challenges to Americans' ability to get help, researchers have found.

And the population using Medicaid is more likely than those on commercial insurance to live with a substance use disorder: 21% of Medicaid users had some form of SUD compared to 16% of commercially insured Americans, according to KFF, the nonpartisan health research firm formerly known as Kaiser Health News.

In order to visualize how Medicaid acceptance rates can vary by state, Ophelia analyzed data collected by the Substance Abuse and Mental Health Services Administration in its survey of substance use disorder treatment centers nationwide. The data used in this analysis covers both public and private institutions in every state, totaling nearly 15,000 locations. The analysis did not include institutions that are funded by discretionary public dollars, such as from county health authorities.

American treatment centers do not universally accept Medicaid, and only 74% of them took it as payment in 2022, according to SAMHSA. Medicaid even covers methadone treatment for opioid use disorder, though the fraction of treatment centers offering opioid treatment programs also do not accept Medicaid universally. And when patients can't utilize insurance, their only option is to pay out of pocket.

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Texas, California, and Florida have the fewest treatment centers accessible by Americans dependent on Medicaid

Nationwide, the percentage of substance use disorder treatment centers that accepted Medicaid as payment hardly grew from 73% in 2021 to 74% in 2022, according to the latest data from SAMHSA.

The most populous states in the nation were more likely than others to have the lowest rates of Medicaid acceptance. Some of these states in the South, like Florida and Texas, are also controlled by elected officials who have blocked the expansion of Medicaid coverage under the Affordable Care Act, effectively reducing the population that could use it to pay for health care for conditions like substance use disorder.

But even in states where Medicaid is widely accepted, other issues block access to treatment for those with substance use disorders. In Montana, the state petitioned and received approval in 2022 to expand the number of beds centers could provide for Medicaid patients. To date, 36 other states have received waivers from Medicaid to expand benefits similarly, according to KFF.

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Treatment centers in some states make strides in expanding access to treatment for those on Medicaid in 2022

Missouri, Vermont, Colorado, and Mississippi all saw significant increases in the number of treatment centers accepting Medicaid in 2022 compared with the year before.

Each state that cracked the top 10 for Medicaid acceptance growth—except for Texas—has petitioned for and been granted Medicaid waivers to increase capacity to care for those using public insurance, suggesting that removing limitations on providers may make Medicaid acceptance more attractive.

But not every state saw Medicaid acceptance grow.

Twenty states had declining acceptance rates at treatment centers from 2021-2022. In Hawaii, Arkansas, South Dakota, and Nevada, the share of treatment centers accepting Medicaid as payment decreased at least 5 percentage points from the previous year.

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The Medicaid Managed Care Rule published on May 10 has lots of moving parts. As my colleague Leo Cuello explains, the rule includes provisions to increase the transparency of state directed payments (SDPs). The rule also contains a number of other transparency requirements that are the focus of this blog, most of which are identical to those CMS proposed a year ago. If implemented, these new requirements have the potential for changing the culture of opacity that has long existed in Medicaid managed care and has long undermined its effectiveness. (Transparency requirements in the Medicaid Access rule relating to fee-for-service payment rates are summarized in this blog by my colleague Kelly Whitener).

Transparency matters. In the 42 states (including DC) that contract with managed care organizations (MCOs), Medicaid purchases billions of dollars of services on behalf of tens of millions of enrollees. Oversight of these arrangements is, to say the least, challenging for state Medicaid agencies and CMS. Transparency about the performance of individual MCOs for children and other enrollees is essential to accountability of MCOs, state Medicaid agencies, and CMS alike.

The rule builds upon transparency requirements in current regulations issued in 2016. These begin with the requirement that state Medicaid agencies contracting with MCOs operate a public website that provides content specified in the regulations. In some cases, the requirement could be met by linking to the public websites of individual MCOs. The requirement took effect in 2017. Table 1 below indicates the content that the state agencies were required to post on the website and the dates by which the agencies were required to post that information.

Table 1: 2016 Medicaid Managed Care Rule Transparency Requirements

A requirement that content be posted on a state agency website is one thing. Compliance with that requirement is quite another. As CMS notes in the preamble to the new rule:

“A State’s website may be the single most important resource for information about its Medicaid program and there are multiple requirements for information to be posted on a State’s website throughout 42 CFR part 438.…Despite these requirements, we have received input from numerous and varied interested parties since the 2016 final rule about how challenging it can be to locate regulatorily required information on some States’ websites. There is variation in how ‘‘user-friendly’’ States’ websites are, with some States making navigation on their website fairly easy and providing information and links that are readily available and presenting required information on one page. However, we have not found this to be the case for most States.”

As an interested party, we could not agree more.

To address this bureaucratic malpractice, the rule requires that state agency websites (1) place “clear and easy-to-understand labels” on documents and links and (2) include all content on one webpage, either directly or by link to individual MCO websites. The rule further requires that states verify the accurate function of the website and the timeliness of the information presented, at least quarterly. States have until the first rating period for contracts beginning on or after 2 years after July 9, 2024 to comply. For most states, that means 2027.

The rule reaffirms that all of the transparency requirements in Table 1 apply currently. Some of these requirements are already set forth in the section of the current regulations relating to transparency (42 CFR 438.602(g)(1)-(4)). To “help States verify their website’s compliance,” the rule adds the remaining current requirements to this checklist (438.602(g)(5)-(8), (12)-(13)), as well as references to the new information states are required to develop and post over the next five years (438.602(g)(9)-(11)). These additional requirements and their compliance dates are summarized in Table 2 below. The implementation runway is lengthy.

Table 2: 2024 Medicaid Managed Care Rule Additional Transparency Requirements

Going Forward

The Managed Care Rule presents advocates with a golden opportunity to use transparency to increase the accountability of individual MCOs (and the state agencies that contract with them) for their performance. Advocates could start by conducting an inventory of their state agency’s website to determine whether all of the information identified in Table 1 is posted as currently required and initiating a conversation with their state agency about any missing items. For extra credit, advocates could urge their state agencies to go beyond the federal minimum and post MCO-specific EPSDT participation data, as Minnesota has done, as well as the Annual Medical Loss Ratio reports that MCOs submit, as several states have done.

As noted, the rule requires that state websites be easily navigable, accurate, and up to date by 2027. Compliance with the current transparency requirements does not depend on whether a state complies with these new website requirements. Nor, for that matter, does the rule prohibit a state from making any necessary improvements to its website before 2027. But the fact is that, in many states, compliance will require a change of agency culture relating to transparency. One case in point: Illinois. And as the ongoing saga over the lack of transparency of Managed Care Program Annual Reports illustrates, that will not happen without sustained and effective state-level advocacy.

Click here to view the tables: https://ccf.georgetown.edu/2024/05/17/a-closer-look-at-transparency-in-the-medicaid-managed-care-rule/

The nation’s largest Medicaid insurer is pledging to help build nearly $1 billion worth of affordable housing in eight states as it moves to address one of the biggest determinants of health.

Speaking at Fortune’s Brainstorm Health conference Monday, Centene CEO Sarah London said that the Centene Foundation—the insurer’s philanthropic arm—struck a multiyear partnership with affordable housing developer McCormack Baron Salazar to provide below-market loans for housing units.

The partnership will unlock $900 million in development funds and create thousands of housing units, said London. The issue of affordable housing is especially important to Centene’s members, London added.

“It’s about doing a lot with a little, which is something that our members are uniquely amazing at and I think speaks to our mission of transforming not just health care, but transforming the health of the communities that we serve,” London said.

It’s a reflection of the fact that, in America’s socially and economically stratified society, the health care system is only a small factor in what drives health care outcomes. These inequalities are evident in everything from the disparate impact of the coronavirus pandemic to the 15-year gap in life expectancy between the richest and the poorest Americans.

“We know 80% of what drives health is nonmedical. Eighty percent,” Dr. Michelle Gourdine, senior vice president at CVS Health, said earlier in the conference. “We could have the best doctors in the universe and it would only fix 20% of the problem.”

In recent years, the public health community has zeroed in on housing’s effects in particular, as costs have shot up and evidence has mounted about the destructive effects of housing instability. Last week, UnitedHealth Group announced that it had surpassed $1 billion in affordable housing over the last decade. In 2022, Kaiser Permanente also pledged $400 million to economic development and housing.

For the one in four Americans who were enrolled in Medicaid, getting access to affordable housing is especially important, and there was a shortage of 7.3 million affordable homes in the U.S. in 2023, according to the National Low Income Housing Coalition.

As London and other attendees said Monday, most of what drives health is nonmedical. London added that across demographic groups, some of the things that people recognize as important to health include housing, food, and access to childcare.

“We, of course, make sure that there is access to health care, but we also think about what are those things that are other drivers to health outcomes,” London said.

In 2024, Affordable Care Act (ACA) Marketplace enrollment hit a new record high, reaching over 21 million people, almost double the 11 million people enrolled in 2020. This growth can be largely attributed to enhanced subsidies made available by the American Rescue Plan Act (ARPA) in 2021 and renewed under the 2022 Inflation Reduction Act (IRA). These enhanced subsidies significantly reduced premium payments across the board for ACA Marketplace enrollees – including providing 100% premium subsidies for the lowest-income enrollees – and made some middle-income people who had previously been priced out of coverage newly eligible for financial assistance.

Figure 1: 2024 ACA Open Enrollment Hits a New Record

Total ACA Marketplace Plan Selections During Open Enrollment, 2014-2024

Although the Inflation Reduction Act’s enhanced subsidies are available nationwide, some states have seen faster growth than others. In 15 states, ACA Marketplace enrollment has more than doubled since 2020 (Figure 2). One of these states is Texas, where ACA enrollment has more than tripled since 2020. Meanwhile, 3 states’ Marketplaces have seen enrollment fall since 2020.

Figure 2: In 15 States, Affordable Care Act (ACA) Marketplace Enrollment More than Doubled from 2020 to 2024

Change in Affordable Care Act (ACA) Marketplace Signups, 2020 - 2024

The five states with the fastest growth in Marketplace enrollment since 2020 – Texas (212%), Mississippi (190%), Georgia (181%), Tennessee (177%), and South Carolina (167%) – have certain characteristics in common: They all started off with high uninsured rates before the enhanced subsidies rolled out, they have not expanded Medicaid under the ACA, and they all use the Healthcare.gov enrollment platform.

It is difficult to disentangle the effect of each of these factors (uninsured rate, Medicaid expansion, and enrollment platform), as they are correlated and closely connected to one another. Nonetheless, the data suggest that a large number of uninsured people in these southern states with high uninsured rates wanted health insurance coverage, and the recently enhanced subsidies have made it possible for them to afford that coverage. However, these subsidies are temporary and will expire at the end of 2025 if not renewed by Congress.

Uninsured Rate

When considering the varying growth rates of Marketplace enrollment across states in recent years, it is important to keep in mind that states had different starting points before the enhanced subsidies in the ARPA and IRA were rolled out. The nonelderly uninsured rate in 2019 ranged from less than 5% in Massachusetts, the District of Columbia, and Hawaii to over 15% in Mississippi, Georgia, Florida, and Oklahoma, and over 20% in Texas. Generally speaking, states with higher uninsured rates in 2019 saw faster growth in ACA Marketplace enrollment from 2020 to 2024, while those with the lowest uninsured rates saw their market sizes generally grow less or even shrink a bit. On average, states that started out with nonelderly uninsured rates below 10 percent in 2019 saw an average of 31% growth in ACA Marketplace enrollment, while states with uninsured rates of 10 percent or more saw an average growth of 136% from 2020 to 2024.

Figure 3: Since 2020, ACA Marketplaces Have Generally Grown Faster in States that Started off with Higher Uninsured Rates

Weighted average percent change in ACA Marketplace Enrollment (2020-2024)

Medicaid Expansion

Another closely related factor that could explain why some states are seeing faster growth in their ACA markets is Medicaid expansion. On average, non-expansion states have seen their ACA Marketplaces grow by 152% since 2020, compared to 47% average growth in expansion states.

Figure 4: Affordable Care Act Marketplaces have Grown Faster in Medicaid Non-Expansion States

Weighted average percent change in ACA Marketplace Enrollment, 2020-2024

The Inflation Reduction Act subsidies bring premiums for ACA Marketplace silver plans down to as low as $0 per month for people with incomes between 100% and 150% of poverty. Meanwhile, in states that have expanded Medicaid, people with incomes up to 138% of poverty are eligible for Medicaid and are therefore ineligible to purchase ACA Marketplace plans. There are therefore relatively fewer people in Medicaid expansion states who would qualify for one of these “free” silver plans on the ACA Marketplaces. This could explain, in part, why there has been faster Marketplace growth in several non-expansion states. (With North Carolina recently expanding Medicaid, there are now 10 states, primarily in the South, that have chosen not to expand the program).

The unwinding of the pandemic-era Medicaid continuous enrollment policy, which led to millions of people losing Medicaid in 2023 after having their coverage maintained during the pandemic, likely contributed to the steeper increase in Marketplace enrollment during the 2024 open enrollment period. As states unwind the Medicaid continuous enrollment policy, these $0 premium, low-deductible ACA Marketplace plans may make the transition from Medicaid to Marketplace coverage easier, especially for people with incomes just above the poverty level in non-expansion states.

Enrollment Platforms

Growth in ACA Marketplace enrollment in recent years also correlates with enrollment platforms. The 23 states with the fastest growth in ACA Marketplace enrollment from 2020-2024 all use the Healthcare.gov enrollment platform. States using Healthcare.gov saw a weighted average growth of 126% in ACA Marketplace enrollment from 2020 to 2024, compared to 22% growth in states using state-run enrollment websites. All 10 states that have not expanded Medicaid use the Healthcare.gov platform.

Figure 5: States with the Most Growth in ACA Signups use the HealthCare.gov Platform

Change in Marketplace Plan Selections, 2020 and 2024

Another difference is that only Healthcare.gov states have Enhanced Direct Enrollment, which allows health plans and insurance brokers to directly enroll and provide customer service to enrollees throughout the year without the consumer needing to visit the Marketplace website (Healthcare.gov). In recent years, brokers have played a growing role in assisting Marketplace consumers.

However, states that use their own enrollment websites also had different starting points in 2020, ahead of the enhanced subsidies passing in 2021. Some state-based Marketplaces were already using state funds to offer additional health insurance subsidies beyond those offered by the federal government. Additionally, several states with their own Marketplaces had long embraced the ACA and have directed state resources toward outreach and marketing efforts for a decade. By contrast, states that rely on Healthcare.gov had significant cuts to outreach and marketing budgets during the Trump administration, with those investments renewed in 2021 under the Biden Administration.

Table 1: Marketplace Plan Selections, 2020 and 2024

View figures and tables here

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Southern Republican-led states looked at expanding Medicaid this year to help cover more people who can't afford health insurance. And even though those efforts made some headway, they struggled to overcome the politics. Drew Hawkins of the Gulf States Newsroom reports.

DREW HAWKINS, BYLINE: Seven of the 10 states that have refused to adopt Medicaid expansion are in the South. Mississippi is one of them. This year, the state came so close, but in the end, expansion efforts fizzled and died in the legislature. So what's the deal? Why the hang-up? Well, one Mississippi doctor does not pull any punches with his answer.

ROGER GIVENS: It's called the stupidity of politics, period.

HAWKINS: Dr. Roger Givens is a radiation oncologist. He practices in rural Mississippi, in an area known as the Delta.

GIVENS: I mean, that's about as rural as it gets.

HAWKINS: He's also the board chair of the Mississippi State Medical Association, which wholeheartedly supports Medicaid expansion. Givens says it's long overdue, especially since most residents want it and other states in the South have already done it.

GIVENS: Look at Arkansas, which has a very similar population to us, and look at what has worked for them and what needs to be tweaked. For me, that's just common sense.

HAWKINS: Givens says people need health coverage. Because when they can't regularly see a doctor, bad things can happen.

GIVENS: I can't tell you the number of patients who come in with advanced disease who have full-time jobs. Plain and simple. That's the coverage gap.

HAWKINS: The coverage gap Givens is talking about only exists in states that haven't adopted Medicaid expansion. It's filled with thousands of people who make too much to qualify for Medicaid but too little to afford private insurance. But Mississippi lawmakers wanted this Medicaid coverage to come with a work requirement. Recipients would have to show they were working part time or in school.

JASON WHITE: That's just a place that I think you're going to see a conservative state come from.

HAWKINS: That's Mississippi Republican House Speaker Jason White. He supports expansion. And a work requirement makes it more palatable for Republicans because Medicaid expansion is part of the Affordable Care Act passed under President Obama.

WHITE: You know, no denying it's known as Obamacare.

HAWKINS: But work requirements weren't part of the original deal. And without a special waiver for that from the Biden administration, Mississippi can't get the money from the federal government. And that's why expansion failed. But White still thinks expanding Medicaid is the right thing to do because it would bring much-needed health care dollars to Mississippi. And that's been his message to his fellow Republicans.

WHITE: Come for the savings, if you will, and then you can stay for the salvation and the good things that it does to improve people's lives.

HAWKINS: Besides Mississippi, Alabama also tried to open the door to Medicaid expansion this year. The program would have focused narrowly on rural health, using casino gambling funds to pay for it, but it ultimately failed. And Republicans in Alabama remain wary of any new coverage that doesn't come with work requirements. Justin Bogie is with the Alabama Policy Institute, a conservative think tank.

JUSTIN BOGIE: So we think if you expand Medicaid and you open up this federal subsidized program for hundreds of thousands of people, then it could actually hurt that labor participation rate, give them another reason not to go to work, to stay at home.

HAWKINS: More and more holdout states in the South are adopting or warming up to expansion. North Carolina extended coverage to around 600,000 people this year. But there's still opposition. In Georgia, the governor wants to see if his own alternative program that allows people who work to join traditional Medicaid can succeed. It's about three times more expensive per person for the state and right now only has just over 2,300 participants, less than 1% of people Medicaid expansion would cover. For doctors like Givens, the debate around work requirements seems unnecessary. Sixty percent of the uninsured Mississippians already have a job.

GIVENS: I'm confused on this whole argument about why does there need to be a work requirement if we're talking about employees who are working who need coverage?

HAWKINS: Studies show the South has high rates of chronic disease and poor health, and it's especially difficult for patients in the rural South. And that's why some Mississippi Republicans in favor of expansion say they'll try again next year with the momentum they've already built. For NPR News, I'm Drew Hawkins. Transcript provided by NPR, Copyright NPR.

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