Home-based care is increasingly delivered under Medicare Advantage (MA) plans, often squeezing providers with thin margins. Despite MA’s growing market share, a “substantial” number of consumers are opting to switch back to traditional Medicare, according to new research.

More than 35.7 million Americans are currently enrolled in MA plans. However, one in ten switch to traditional Medicare during open enrollment, according to a study from researchers at the Institute for Healthcare Policy & Innovation at the University of Michigan, Ann Arbor.

Using data from the 2015-2020 Medicare Current Beneficiary Survey, researchers found that while MA is growing in popularity, it is also experiencing significant plan disenrollment among high-risk Medicare beneficiaries due to limited access to necessary care and dissatisfaction with the quality of care received.

Every five years, as many as half of MA enrollees switch from one MA plan to a different MA plan, and 10% exit MA for traditional fee-for-service Medicare, according to the study.

Researchers also discovered that access issues were the main reason beneficiaries abandoned MA entirely and returned to traditional Medicare – this was a significantly more common reason than differences in costs.

“We were surprised to see the differences in disenrollment factors for those switching between MA plans and those leaving MA for traditional Medicare – compared to switching, exits were more strongly associated with trouble getting needed medical care,” lead author Dr. Geoffrey Hoffman, an associate professor at the University of Michigan School of Nursing, told Home Health Care News. “This highlights the downside of utilization management, which can restrict the types and amount of care enrollees receive, causing them to leave MA plans.”

The theoretical benefit of MA plans on the private market is that people can shop around as their needs evolve, Hoffman said. However, in reality, people often need to experience medical care firsthand before realizing whether a different plan would better suit their needs.

Those who switch to traditional Medicare often have greater health care needs than those who stay enrolled in MA. Their decisions are more strongly driven by dissatisfaction with access to care under MA plans, according to the study.

Customer satisfaction

Consumers who switched from an MA plan to another form of Medicare were more likely than those who stayed to report challenges accessing care, along with dissatisfaction with the cost and quality of the care they received.

However, cost alone was not a driver of plan switching. Instead, factors such as poor access to care, low quality, low plan star ratings and less generous fringe benefits played a more significant role in the decision to leave.

“Interestingly, dissatisfaction with costs is not a factor, but plan generosity is a factor for switching between MA plans,” Hoffman said. “Enrollees likely think about premiums when they reflect on plan costs, whereas plan generosity refers to out-of-pocket costs like co-pays for clinical services. Enrollees may like their low MA premiums, but they may be expressing frustration with other, less transparent costs in MA that can restrict their access to needed care.”

Hoffman also noted that participants are more likely to choose plans that provide additional benefits beyond those offered in traditional Medicare plans, such as discounts on fitness programs or meal deliveries.

Consumers who reported difficulties accessing care were more likely to switch from MA to traditional Medicare, which does not restrict the selection of doctors and hospitals available to enrollees.

Those who were reportedly in poor health, about 15%, were twice as likely as other MA enrollees to report difficulties in accessing care when they needed it, three times more likely to be dissatisfied with the quality of their care and more than twice as likely to be unhappy with the cost of their care and their specialty care.

Despite this dissatisfaction, Hoffman believes that MA enrollment will continue to increase.

“MA exit rates are generally fairly low – 3.5% annually for MA-to-traditional Medicare exits, although MA-to-MA switching is very common,” Hoffman said. “[Consumers] will likely continue to enroll in MA because it feels like a great deal — and for some, it may be. For others, however, disappointment may come. Exit rates are significantly higher for individuals in poorer health or those who use more health care services. To the extent that Medicare beneficiaries increasingly enroll in MA, we may continue to see disproportionate disenrollment rates from dissatisfied enrollees who cannot access needed high-quality services.”