Medicare Advantage (MA) plans have become increasingly popular among Medicare beneficiaries due to the comprehensive healthcare coverage they offer. However, it’s important for beneficiaries to understand that they have opportunities to disenroll from their plans under certain circumstances. In this blog post, we will explore the reasons for disenrollment, the impact of high disenrollment rates, and how disenrollment data can be a valuable tool for making informed healthcare decisions.

Reasons for Disenrollment

Beneficiaries enrolled in Medicare Advantage plans may disenroll from their plans for various reasons, both voluntary and involuntary. Some common reasons include:

1. Change in Residence: If a beneficiary moves outside the plan’s service area, they may be required to disenroll.
2. Loss of Medicare Eligibility: If a beneficiary loses their eligibility for Medicare, they will need to disenroll from their MA plan.
3. Termination of Plan’s Contract: If Medicare terminates a plan’s contract, beneficiaries will be forced to disenroll.
4. Failure to Pay Premiums: Beneficiaries who fail to pay their plan premiums may be involuntarily disenrolled.
5. Dissatisfaction with Providers or Coverage: Beneficiaries may choose to leave their plan if they are dissatisfied with the providers covered, if their medical needs change, or if out-of-pocket costs become too high.

High Disenrollment Rates and Quality of MA Plans

High rates of voluntary disenrollment can serve as an indicator of the quality of MA plans. It suggests that beneficiaries may not be having positive experiences with their plans, and the plans may not be meeting their needs effectively. People also disenroll when they discover that different coverage options might better suit their needs.

Research has shown that individuals with chronic conditions and lower incomes are more likely to disenroll from MA plans. Complex plan requirements, like the need for prior authorization or limitations in coverage for out-of-network services, can contribute to higher disenrollment rates in these populations. Regardless of the reasons, disenrollment from an MA plan can disrupt a beneficiary’s care.

Disenrollment Rates and Reasons

Data from the Centers for Medicare and Medicaid Services (CMS) indicates that, on average, about 17 percent of enrollees voluntarily disenrolled from an MA plan in 2021, which represents a significant increase from 2017 when the disenrollment rate was only 10 percent. The reasons for disenrollment varied:

• Coverage Issues and Financial Concerns: Approximately 23 percent of beneficiaries reported that coverage problems with physicians and hospitals, high premiums, and out-of-pocket expenses were significant factors in their decision to disenroll.
• Problems Getting Services Covered: About 18 percent of beneficiaries cited difficulties in getting the plan to cover services, including issues with claims, approval processes, denial of services, or inability to receive necessary care.
• Customer Service Issues: An average of 13 percent of disenrolled beneficiaries faced customer service issues, such as obtaining accurate information about how the plan works.
• Prescription Drugs and Benefits: Approximately 9 percent of disenrolled beneficiaries mentioned issues related to prescription drugs and benefits, including coverage limitations and changes in drug formularies.

Disenrollment Data as an Informed Decision-Making Tool

Understanding disenrollment rates and the reasons for disenrollment is crucial for Medicare beneficiaries, especially those with chronic conditions or complex healthcare needs. This information can help beneficiaries make informed choices during open-enrollment or special-election periods.

Currently, disenrollment rates are available on Medicare’s plan finder tool, but they are reported at the level of the insurer contract and not at the individual plan level. This limitation makes it challenging for beneficiaries to assess the performance of specific plans. More detailed performance data, including disenrollment rates and reasons, categorized by beneficiary characteristics, would provide a more accurate picture for informed decision-making.

As the number of beneficiaries enrolling in Medicare Advantage plans continues to grow, accurate information on plan disenrollment will become increasingly important. Policymakers and beneficiaries alike can benefit from comprehensive data to monitor plan effectiveness and make informed health plan choices.

Disenrollment from Medicare Advantage plans is a complex issue influenced by various factors. Beneficiaries should be aware of their options and the reasons for disenrollment. Disenrollment data, when presented accurately and comprehensively, can empower beneficiaries to make informed healthcare decisions and help policymakers ensure the effectiveness of these plans.