As Medicare Advantage plans pull out of rural areas, patients stand to lose access to critical care

Surrounded by sugar cane fields, the small town of Bunkie has all the markings of a struggling former railroad town. Train tracks run through the center of the town alongside a short main street of shops, surrounded by reminders of the town's former glory: an abandoned hotel, historic signs for businesses no longer in existence, boarded-up storefronts.

Bunkie's population is significantly older and poorer than the state average, with nearly half its population living in poverty according to census data, and a median age 10 years above the state's.

Places like Bunkie are where Medicare Advantage plans, with their low premiums and sign-up perks, such as grocery store gift cards, hold special appeal. It also is the kind of place the plans are increasingly pulling out of.

"They're quite popular," Linda Deville, CEO of Bunkie General Hospital, said of the Medicare Advantage plans. But, she warned, "You don't know who's going to cover you or not cover you; your care may be delayed."

For cash-strapped seniors, the promise of zero to low premiums and a Walmart gift card to go with them seem like a good deal. Medicare Advantage plan enrollment has grown significantly in rural areas over the past 10 years. Today, more than half of Louisiana's Medicare population is enrolled in Medicare Advantage plans, according to the Department of Insurance.

The Medicare Advantage program, which offers a privately-managed alternative to the federally-managed health insurance coverage for the elderly and disabled, was created in 2003, although some version of privately-managed Medicare coverage had already been in existence for nearly 20 years by then. The stated goal was to provide beneficiaries with more choices of coverage and to transfer some of the efficiencies of the private market to the government-funded program.

But beneficiaries' access to private plans has been inconsistent over the program's history, and Medicare Advantage generally has cost the government more than the traditional Medicare program, an overpayment that has increased over the years, researchers have found.

One study of Medicare Advantage billing data found that Medicare overpaid the private health plans by more than $106 billion from 2010 through 2019, with $34 billion of that spend occurring just within the last year of the time period analyzed. Meanwhile, Medicare Advantage insurers have reported much higher margins than those providing plans in other markets.

Over the past two years, the Biden administration has opted for more moderate payments to Medicare Advantage providers, and the profitability of those plans for the companies that offer them has decreased.

Subsequently, many of them are pulling out of rural markets like Avoyelles Parish.

Across the state — and the country — hospitals have received letters notifying them that they will be kicked out of network by Medicare Advantage providers.

"It's happening nationally," said Vicky Dufrene, director of the Louisiana Senior Health Insurance Information Program (SHIIP) at the Louisiana Department of Insurance.

Dufrene recently attended a conference of insurance commissioners and their staff where contract terminations by Medicare Advantage insurers were a hot topic. "We're all upset because it's affecting every state," she said.

So far, she said, Louisiana is among the lucky ones, because unlike other states represented at the conference, no major health systems have faced terminations or opted to stop accepting Medicare Advantage plans themselves, potentially leading to thousands of patients losing access to their usual providers at once.

But for rural health providers, the severing of contracts has significant consequences — although it is not always entirely clear what the effects on patient access will be. And across the state, terminations are spreading.

Back home in Louisiana, Dufrene has been charged with helping a rural hospital in St. James Parish inform roughly 850 patients that their Medicare Advantage plan, also offered by Humana, will no longer contract with the hospital and its physicians after the end of the year.

At Bunkie General, Deville worries that once her hospital becomes an out-of-network provider with Humana, the major insurer of Medicare Advantage enrollees in the area, the company will deny any nonemergency care at her hospital through the prior-authorization process.

That process has already been a concern, even with a contract in place, with Medicare Advantage insurers denying care that doctors at the hospital deemed necessary.

Medicare Advantage providers are paid a set amount per patient, plus additional monies for patients with preexisting conditions that are likely to lead to more costly care. Anything above that per-patient amount is assumed as a risk by the insurance company.

"They're trying to steer their patients to the cheapest route, if they approve it at all," Deville said.

Once the hospital is an out-of-network provider, Deville worries that patients will be denied approval for any kind of care by their existing doctors at Bunkie General, forcing them to find new providers in a rural area where options are scarce or potentially face much higher out-of-pocket costs to stay with their previous doctors.

Despite being a small hospital, Bunkie General serves as a hub for medical care in the community.

Bunkie HomeCare, a local home health service, has a contract with Humana and accepts enrollees of the company's Medicare Advantage plan on a case-by-case basis.

"We do blood work in the home. We bring that blood work to Bunkie General and drop it off. How is that going to affect the patient if they have Humana?" account executive Terri Gremillion wondered out loud.

Neither Humana nor Peoples Health responded to requests for comment.

Some samples have to be dropped off within a certain time frame, and depending on the patient's location, another hospital might not be within reach, she noted.

"There's all kinds of scenarios that we're going to have to run through and figure out: how is this going to work and how are we going to be able to take care of patients?" she said.

With open enrollment underway, Gremillion is part of a group that is educating Medicare-eligible residents on the different options available to them and the potential limitations posed on care by the upcoming contract termination, which Bunkie General is still appealing.

Educating the mostly elderly residents on their options includes explaining some of the main differences between traditional Medicare and the privately-managed plans.

"Medicare benefits are cut and dry," Gremillion said. Advantage plans, not so much, she noted. "Unless the recipient knows what to ask, they may not know until the time arises that they need that care."