By Mark Merritt, Executive Director, Insurance Watchdog Coalition
As Medicare open enrollment begins, insurers are cutting Medicare Advantage plans that let seniors choose their doctors and hospitals. To no one’s surprise, they’re replacing them with far more restrictive plans that put new obstacles between seniors and care.
Now 3.2 million seniors — many in preferred provider organizations (PPOs) — will have to switch to plans with more restrictions and, in many cases, higher out-of-pocket costs.
Insurance executives call this a switch to “High Value HMOs.” That’s code for plans that profit insurers at patients’ expense.
Many of these HMOs are Special Needs Plans (SNPs) for Medicaid patients or seniors with chronic conditions. While these patients’ needs are special, their care is not.
Insurers get higher payments from taxpayers to enroll special needs patients, but there’s little evidence of better outcomes. Many of these plans increase profits through narrow networks and other limits on care.
While all Medicare Advantage plans cover far fewer doctors than traditional Medicare, “High Value HMOs” are even more draconian. Medicare Advantage plans denied 4.1 million prior authorization requests in 2024.
The big winners are insurers. This quarter, the nation’s largest Medicare Advantage insurer, UnitedHealth, posted a $4.1 billion profit while spending $3 billion LESS on care across its entire business than a year ago.
It also owns nearly 2,700 subsidiaries, including doctors’ practices, pharmacies and surgery centers, and does $151 billion a year in business with itself. Researchers found UnitedHealthcare pays its own doctors 17% more than independent doctors for the same services.
As Congress looks to reduce wasteful spending in federal health programs, it should ask a simple question: why are taxpayers paying insurers MORE for plans that offer seniors LESS?