Put Patients First and Fix Medicare Advantage
This isn't complicated—it's willpower.
Medicare Advantage (MA)—a popular system of competitive private health plans—can be greatly improved. Congress can do so by expanding benefit options for patients and enhancing the quality of patient care. Working closely with the White House and foregoing partisan bickering, bipartisan cooperation can make that happen.
Most Medicare patients are enrolled in MA for obvious reasons: it is convenient; patients pay only one premium for comprehensive coverage, including drug benefits; and there is a hard cap on their out-of-pocket costs.
But the program, though popular, is far from perfect; but it is marred by flaws that are easily fixable. At the Heritage Foundation, we have identified 14 specific policy changes that could greatly improve the program. Working closely with the White House, there is no reason why Congress cannot remedy MA’s problems, many of which are amenable to bipartisan solutions. For example:
Broaden Benefit Options. There are gaps in MA coverage that make no sense. For example, the program includes a small number of Medical Savings Account (MSA) plans, a close equivalent to health savings account plans in the private sector.
The plans deposit funds into a beneficiary’s account, and beneficiaries draw upon this account to meet their medical expenses. The problem: they cannot offer prescription drug coverage like all other MA plans, forcing Medicare patients to enroll in a separate Medicare Part D drug plan and pay an additional premium. Beyond being anti-competitive, such a restriction is just silly.
Likewise, under current law, beneficiaries in MA patients needing end of life care can only get hospice coverage under the traditional Medicare program. MA insurers, who have excelled at case management and coordinated care, today often provide palliative care for patients with serious illnesses that require extended recovery, but not hospice care. This makes no sense.
Congress should not impose a hospice benefit mandate, of course; but if health plans wish to extend palliative care—which many offer today—into hospice coverage for the full continuum of patient care, they should be allowed to do so. And MA patients should be permitted to take advantage of this option in their chosen plans.
Fix Prior Authorization. In traditional Medicare, there is virtually no prior authorization, the equivalent of an insurer’s permission slip, to provide medical services. Instead, doctors are simply reimbursed on a fee-for-service (FFS) schedule for providing a covered service.
Medicare doctors, laboring under a flawed administrative payment system, thus have a strong incentive to increase their revenues by jacking up their service volume, but volume increases do not necessarily translate into value for Medicare patients. Not surprisingly, overpayments, inappropriate, unnecessary, or “improper” payments are a big problem in Medicare FFS. The Centers for Medicare and Medicaid Services, reported “improper” FFS payments totaling $31. 7 billion. in Fiscal Year 2024 alone.
With MA, the problem is the reverse.
Virtually all MA plans require prior authorization for medical treatments or procedures, though this varies widely among health …
This isn't complicated—it's willpower.
Medicare Advantage (MA)—a popular system of competitive private health plans—can be greatly improved. Congress can do so by expanding benefit options for patients and enhancing the quality of patient care. Working closely with the White House and foregoing partisan bickering, bipartisan cooperation can make that happen.
Most Medicare patients are enrolled in MA for obvious reasons: it is convenient; patients pay only one premium for comprehensive coverage, including drug benefits; and there is a hard cap on their out-of-pocket costs.
But the program, though popular, is far from perfect; but it is marred by flaws that are easily fixable. At the Heritage Foundation, we have identified 14 specific policy changes that could greatly improve the program. Working closely with the White House, there is no reason why Congress cannot remedy MA’s problems, many of which are amenable to bipartisan solutions. For example:
Broaden Benefit Options. There are gaps in MA coverage that make no sense. For example, the program includes a small number of Medical Savings Account (MSA) plans, a close equivalent to health savings account plans in the private sector.
The plans deposit funds into a beneficiary’s account, and beneficiaries draw upon this account to meet their medical expenses. The problem: they cannot offer prescription drug coverage like all other MA plans, forcing Medicare patients to enroll in a separate Medicare Part D drug plan and pay an additional premium. Beyond being anti-competitive, such a restriction is just silly.
Likewise, under current law, beneficiaries in MA patients needing end of life care can only get hospice coverage under the traditional Medicare program. MA insurers, who have excelled at case management and coordinated care, today often provide palliative care for patients with serious illnesses that require extended recovery, but not hospice care. This makes no sense.
Congress should not impose a hospice benefit mandate, of course; but if health plans wish to extend palliative care—which many offer today—into hospice coverage for the full continuum of patient care, they should be allowed to do so. And MA patients should be permitted to take advantage of this option in their chosen plans.
Fix Prior Authorization. In traditional Medicare, there is virtually no prior authorization, the equivalent of an insurer’s permission slip, to provide medical services. Instead, doctors are simply reimbursed on a fee-for-service (FFS) schedule for providing a covered service.
Medicare doctors, laboring under a flawed administrative payment system, thus have a strong incentive to increase their revenues by jacking up their service volume, but volume increases do not necessarily translate into value for Medicare patients. Not surprisingly, overpayments, inappropriate, unnecessary, or “improper” payments are a big problem in Medicare FFS. The Centers for Medicare and Medicaid Services, reported “improper” FFS payments totaling $31. 7 billion. in Fiscal Year 2024 alone.
With MA, the problem is the reverse.
Virtually all MA plans require prior authorization for medical treatments or procedures, though this varies widely among health …
Put Patients First and Fix Medicare Advantage
This isn't complicated—it's willpower.
Medicare Advantage (MA)—a popular system of competitive private health plans—can be greatly improved. Congress can do so by expanding benefit options for patients and enhancing the quality of patient care. Working closely with the White House and foregoing partisan bickering, bipartisan cooperation can make that happen.
Most Medicare patients are enrolled in MA for obvious reasons: it is convenient; patients pay only one premium for comprehensive coverage, including drug benefits; and there is a hard cap on their out-of-pocket costs.
But the program, though popular, is far from perfect; but it is marred by flaws that are easily fixable. At the Heritage Foundation, we have identified 14 specific policy changes that could greatly improve the program. Working closely with the White House, there is no reason why Congress cannot remedy MA’s problems, many of which are amenable to bipartisan solutions. For example:
Broaden Benefit Options. There are gaps in MA coverage that make no sense. For example, the program includes a small number of Medical Savings Account (MSA) plans, a close equivalent to health savings account plans in the private sector.
The plans deposit funds into a beneficiary’s account, and beneficiaries draw upon this account to meet their medical expenses. The problem: they cannot offer prescription drug coverage like all other MA plans, forcing Medicare patients to enroll in a separate Medicare Part D drug plan and pay an additional premium. Beyond being anti-competitive, such a restriction is just silly.
Likewise, under current law, beneficiaries in MA patients needing end of life care can only get hospice coverage under the traditional Medicare program. MA insurers, who have excelled at case management and coordinated care, today often provide palliative care for patients with serious illnesses that require extended recovery, but not hospice care. This makes no sense.
Congress should not impose a hospice benefit mandate, of course; but if health plans wish to extend palliative care—which many offer today—into hospice coverage for the full continuum of patient care, they should be allowed to do so. And MA patients should be permitted to take advantage of this option in their chosen plans.
Fix Prior Authorization. In traditional Medicare, there is virtually no prior authorization, the equivalent of an insurer’s permission slip, to provide medical services. Instead, doctors are simply reimbursed on a fee-for-service (FFS) schedule for providing a covered service.
Medicare doctors, laboring under a flawed administrative payment system, thus have a strong incentive to increase their revenues by jacking up their service volume, but volume increases do not necessarily translate into value for Medicare patients. Not surprisingly, overpayments, inappropriate, unnecessary, or “improper” payments are a big problem in Medicare FFS. The Centers for Medicare and Medicaid Services, reported “improper” FFS payments totaling $31. 7 billion. in Fiscal Year 2024 alone.
With MA, the problem is the reverse.
Virtually all MA plans require prior authorization for medical treatments or procedures, though this varies widely among health …
