Medicare Advantage Plans and Their Future Under the Incoming Trump Administration
Medicare Advantage plans may continue to play a central role in the healthcare strategy of the incoming Trump administration, with a likely emphasis on expanding access to these plans and reducing government involvement in the direct administration of Medicare. The following points were key priorities during the first Trump administration and are expected to remain a focus in the second:
1. Expansion of Medicare Advantage Plans
Trump supported expanding access to Medicare Advantage, which allows private companies to offer Medicare benefits. His administration aimed to increase the number of beneficiaries enrolling in these private plans, arguing that they would provide more flexibility and additional benefits not available through traditional Medicare.
2. Increased Funding
The Trump administration focused on increasing funding for Medicare Advantage programs to incentivize insurers to offer more competitive plans. This included proposals to boost payments to Medicare Advantage insurers, ensuring they could cover more benefits.
3. Prescription Drug Coverage
Trump sought to include more comprehensive drug coverage within Medicare Advantage plans. His administration advocated for expanding drug benefits, with proposals aimed at reducing prescription drug costs—an issue of particular concern for many Medicare beneficiaries.
4. Telemedicine and Other Benefits
Under the Trump administration, Medicare Advantage plans were encouraged to expand benefits beyond traditional medical care to include services like telemedicine and wellness programs. The goal was to improve overall health outcomes and provide more convenient options for beneficiaries.
The continued expansion of Medicare Advantage is good news for Medicare beneficiaries. However, hospitals and healthcare systems may not share the same perspective. Ongoing administrative challenges, or “back-end” issues, are leading many hospitals and healthcare systems to withdraw from these plans. Some of the key challenges are outlined below:
1. Delayed Payments
Medicare Advantage plans are administered by private insurers, and these insurers sometimes experience delays in processing and paying claims. Such delays can create cash flow problems for healthcare providers, especially those with a large number of Medicare Advantage patients. Hospitals may have to wait weeks or even months to receive payment for services rendered, leading to financial strain and administrative burdens as they follow up on outstanding claims.
2. Underpayment or Payment Denials
Private insurers managing Medicare Advantage plans may fail to reimburse providers adequately for services rendered. In some cases, claims are denied or paid at a lower rate than expected, particularly if there are discrepancies between what hospitals anticipate being reimbursed and what insurers actually pay. Hospitals may receive less reimbursement than they would under traditional Medicare, which is problematic, especially for providers with already narrow profit margins.
3. Complicated Billing and Coding
Medicare Advantage plans often have complex billing and coding requirements that differ from traditional Medicare. Providers can struggle to navigate these requirements, which may lead to errors in billing or claims submissions.
Offering expanded benefits to Medicare beneficiaries is a positive step, but there also needs to be improved regulation for hospitals and healthcare systems that bear the financial risk associated with accepting Medicare Advantage plans.
For more information please contact:
Richard T. (Terry) Lang, CPA, FHFMA-
