Almost all the older Americans who have Medicare Advantage insurance (99%) are subject to prior authorization for some things, most often higher-cost services like inpatient hospital stays, skilled nursing facility stays and chemotherapy, a new study found.
Prior authorization — when an insurer requires a request before a procedure or service — is also rising, according to the Kaiser Family Foundation study, by Jeannie Fuglesten Biniek, Nolan Sroczynski and Tricia Neuman.
“More than 46 million prior authorization requests were submitted to Medicare Advantage insurers on behalf of Medicare Advantage enrollees in 2022, up from 37 million in 2019.”
Traditional Medicare doesn’t require prior authorization, except for a limited set of services.
Medicare Advantage, the privatized version of traditional Medicare, is gaining in popularity, now covering more than half of Medicare beneficiaries. It is popular because it commonly has $0 premiums and some add-ons like vision and dental coverage and other freebies. But the insurance companies impose conditions like prior authorization and other restrictions on Medicare Advantage enrollees.
The new study also found that “Though insurers approved most prior authorization requests, the share of requests that were denied jumped between 2021 and 2022. The share of all prior authorization requests that were denied increased from 5.7% in 2019, 5.6% in 2020 and 5.8% in 2021 to 7.4% in 2022.”
The volume of requests varies from insurer to insurer, the study found. Humana was tops with 2.9 requests per enrollee, while Kaiser was found to have only .5 requests per enrollee.
Hospitals, doctors back out
Prior authorization and subsequent denials are not the only downside of the Medicare Advantage plans. Increasingly, hospitals and doctors are backing out of Medicare Advantage networks because of low pay rates, Kaiser Health News reported recently.
And the quality of care can vary by a lot. “Medicare enrollees living in communities of color and with high rates of poverty had less access to top-rated Medicare Advantage plans last year than those living in wealthier places that are majority white,” Maya Goldman wrote at Axios. These disparities could contribute to unequal health outcomes for seniors across the country as Medicare Advantage enrollment grows, particularly among seniors from diverse and low-income backgrounds.”
Also if you wnt to switch to traditional Medicare, you may find that Medicare Advantage is hard to get out of. During the six months after you sign up for Part B, the Part G supplemental plans many traditional Medicare enrollees choose cannot reject you, or charge a higher premium, because of pre-existing conditions. But after that, you can be rejected or charged more, unless you live in one of four states (Connecticut, Massachusetts, Maine and New York) that provide some level of guarantee to enroll at a later time with pre-existing condition protection.
So if you’re not in one of those four states, and choose to switch out of Medicare Advantage and into traditional Medicare with a Medigap plan, that Medigap plan can and will use a health assessment to see if you have a pre-existing condition and charge more.
