Half of Medicare Advantage Beneficiaries Left Plan After 5 Years

Around half of Medicare Advantage beneficiaries disenrolled from their health plan after five years, a study published in JAMA Health Forum found.

Capitated payments to Medicare Advantage plans aim to incentivize plans to invest in initiatives that will improve health outcomes and reduce spending for beneficiaries. However, beneficiary churn may reduce the incentives to invest in longer-term interventions if beneficiaries are not consistently enrolled in a plan.

Researchers used national enrollment data from the Medicare Master Beneficiary Summary File from 2011 to 2020 to assess the disenrollment patterns in Medicare Advantage plans.

The sample included 82 million beneficiaries. After one year, 13.2 percent of beneficiaries who were not dually enrolled in Medicaid disenrolled from their Medicare Advantage plan, while 15.9 percent of dually enrolled beneficiaries did the same.

After three years, 35 percent of non-dual eligibles and 40.3 percent of dual eligibles had left their plan. After five years, these figures increased to 48.3 percent and 53.4 percent, respectively.

When assessing at the five-year mark, 8.9 percent of non-dual eligibles and 13.6 percent of dual eligibles had switched from Medicare Advantage to traditional Medicare. This indicates that most beneficiaries enrolled in a different Medicare Advantage contract.

Disenrollment rates varied by race, researchers found. Asian and White beneficiaries had the lowest disenrollment at 11.5 percent and 12.9 percent after one year and 40.7 percent and 48.1 percent after five years.

Meanwhile, Black beneficiaries had the highest disenrollment rates at 14.8 percent after one year and 52.6 percent after five years.

Medicare Advantage beneficiaries with a higher comorbidity burden were more likely to disenroll from their plans, according to the study.

Disenrollment rates also differed by plan characteristics.

Increased disenrollment was associated with lower plan ratings. Medicare Advantage contracts with 5-star ratings had lower five-year disenrollment rates (23 percent) compared to contracts with 4 to 4.5 stars (41.2 percent) and 3 to 3.5 stars (67.2 percent).

Preferred provider organizations (74.7 percent) had a higher five-year disenrollment rate compared to health maintenance organizations (54.2 percent). Plans with the highest premiums (56.6 percent) had a lower disenrollment rate after five years compared to $0 premium plans (66.3 percent).

Plans with a larger share of Black beneficiaries also had a higher five-year disenrollment rate than plans with a smaller percentage of Black beneficiaries (70.7 percent versus 53.9 percent).

The high levels of overall disenrollment could highlight beneficiaries’ freedom to choose new Medicare Advantage plans if better choices become available. Conversely, it could indicate that Medicare Advantage plans are not accurately measuring beneficiary discontent. Additionally, it may show that Medicare Advantage plans are not meeting certain health needs.

Incorporating long-term disenrollment into performance measures could help plans better understand their churn and improve investments in longer-term health outcomes.

“As the [Medicare Advantage] program continues to grow, more attention may be needed to ensure that plans are adequately incentivized to take care of patients over time and to ensure that frequent disenrollments do not lead to disruptions in care,” researchers concluded.