Medicare Advantage plans come with advantages, pitfalls

Just when the political ads have all but disappeared after the election this November, you will be bombarded with Medicare Advantage ads as open enrollment in the U.S. nears once again. Some of the ads blur the difference between Medicare Advantage and traditional Medicare. So what is Medicare Advantage, and why have some patients and providers complained about it so loudly?

Medicare is a federal program established in 1965 to provide healthcare coverage mainly for seniors. Originally, it had two parts — Part A for inpatient services and Part B for outpatient services. Most people get Part A for free and have a premium for Part B. Congress added a prescription drug benefit called Part D in 2003.

Because of concerns about increasing costs driven by unnecessary clinical services, Congress added Medicare Part C as an option in 1997. Beneficiaries can voluntarily switch from Parts A, B, and sometimes D to a Part C, or Medicare Advantage, plan that bundles all services together and is offered by a private company approved by Medicare. The belief was that through increased oversight and management of coverage, some costs could be avoided and potentially new services could be offered.

As Medicare Advantage plans have evolved, the ability to cut costs through aggressive management has enabled the plans to attract more beneficiaries by offering benefits not covered by traditional Medicare, such as vision, hearing, and dental services or even gym memberships. However, the reduced costs have come as a result of beneficiaries giving up some provider choice and providers having less control over the care they provide, as well as often antagonistic payment rate negotiations.

Some Medicare Advantage plans have become big money-makers for investors on Wall Street, thus the onslaught of ads each open-enrollment season in the fall. Despite UnitedHealth being the most dominant Medicare Advantage plan in Arkansas with 36% of the market, the competition for enrollees is stiff. This year there are 58 Medicare Advantage plans operating in Arkansas, up from 40 just five years ago.

The ads seem to be working on Arkansans. According to a report by consulting firm Chartis, 44% of Medicare-eligible Arkansans enrolled in Medicare Advantage plans in 2024. In 2010, only 13% of Medicare-eligible Arkansans selected Medicare Advantage plans.

Patient and provider complaints about slow payments, improper denials of care, and prior-authorization requirements, which require providers to get approval in advance from a plan before a service is provided to the patient to qualify for payment, have stoked rare bipartisan outrage in Congress. Legislation requiring plans to expedite approvals for routine care successfully passed the House of Representatives in 2022 but stalled in the Senate, and more recent bills have not gained traction.

In its final rule for Medicare Advantage plans for 2024, the Centers for Medicare and Medicaid Services (CMS) sought to address some of these concerns by streamlining prior-authorization requirements and requiring Medicare Advantage plans to align with clinical criteria guidelines — which drive medical decisions for patient diagnosis, disease management, and treatment — in traditional Medicare. The rule also introduced some restrictions on the ways Medicare Advantage plans can advertise, to protect consumers from confusing or potentially misleading marketing.

Beginning in 2026, CMS expects Medicare Advantage plans to send prior-authorization decisions to providers within 72 hours for urgent requests and within seven days for standard requests. The plans will also have to provide specific reasons for denied requests and publicly report prior-authorization metrics annually.

Short of congressional action, enhanced CMS oversight of Medicare Advantage plans is critically important to ensure timely access to medically necessary treatment for Medicare beneficiaries. This is particularly true given that, although states license and assess the solvency of Medicare Advantage plans, they cannot regulate how Medicare Advantage plans operate.

Administrative review of treatment requests is an important cost-containment tool for Medicare Advantage plans. After all, we want the plans to be good stewards of our tax dollars. However, there should be a balance that ensures timely access to medically necessary treatment for Medicare beneficiaries while also ensuring that providers continue to want to remain in network with Medicare Advantage plans.

If there are abusive practices occurring with Medicare Advantage plans in Arkansas, the squawking will get louder. The ads are hitting their mark, and enrollment is growing. When the open enrollment ads start rolling out in November, or whenever you or a family member turns 65, make sure you know all your options, and seek guidance from an unbiased source such as the Seniors Health Insurance Information Program.

Editor’s note: Craig Wilson, J.D., M.P.A., is the director of health policy for the Arkansas Center for Health Improvement, an independent, nonpartisan health policy center in Little Rock. The opinions expressed are those of the author.