Medicare Advantage beneficiaries in rural areas are more than twice as likely to switch to traditional Medicare plans compared to those in nonrural parts of the country, according to new research published in Health Affairs.

The results of the study reveal a disparity in access to care between rural and nonrural Medicare Advantage (MA) beneficiaries, due in part to limited benefits and restrictive provider networks.

“Access-related concerns may be a leading reason for switching from MA to [traditional Medicare] among rural enrollees, especially for those with great health needs,” co-author Sungchul Park, an assistant professor in the Department of Health Management and Policy at Drexel University, told RetireGuide. “This points to the importance of developing policies targeted at improving care access for rural MA enrollees.”

Researchers analyzed Medicare Current Beneficiary Survey data of 17,888 Medicare Advantage beneficiaries from 2010 to 2016, focusing on member satisfaction and care access.

Switching from a Medicare Advantage plan to traditional Medicare — also known as Original Medicare (Parts A and B) — was more common for rural and nonrural beneficiaries compared to those switching from traditional to Medicare Advantage plans.

But Medicare Advantage enrollees in rural areas had significantly higher rates of switching to Original Medicare than beneficiaries in more populous regions. The survey data shows 10.5 percent of rural beneficiaries made the switch, compared to just 5 percent of nonrural beneficiaries.

“We believe that add-on payment is the most direct potential lever on the payment side,” Park said. “Add-on payment represents a percentage increase over standard payments to providers or plans that serve rural beneficiaries with the goal of encouraging more of the providers or plans to serve rural communities.”

Switching Rates Not Linked to Differences in Health Status

Researchers found little evidence that rural Medicare Advantage enrollees were in worse health or had a higher need for care compared to nonrural beneficiaries.

In other words, health status didn’t skew the results.

Medicare Advantage beneficiaries who used costly services were more likely to switch to traditional plans regardless of where they lived. More than 15 percent of rural MA enrollees and 8.5 percent of nonrural beneficiaries who had acute hospital visits made the switch.

Authors of the study noted that rural enrollees who require more expensive care may face more challenging care-access barriers.

“Our study shows little evidence that rural enrollees were sicker or had higher need than nonrural enrollees or that higher switching rates among rural enrollees were due to differences in health status,” the study authors wrote. “Importantly, our use of self-reported health status is a strength, as it is less likely to be affected by differences in coding patterns.”

Dissatisfaction with Restrictive Provider Networks

Medicare Advantage plans are sold by private insurers and act as an alternative to Original Medicare.

They must offer the same coverage as Medicare Part A and Part B, but enrollees must use doctors and health care facilities within the plan’s network. Original Medicare beneficiaries have access to a vast network of providers who accept Medicare patients.

Medicare Advantage plans are popular because many offer low or $0 premiums. Most offer prescription drug coverage and additional coverage that Original Medicare doesn’t cover, such as vision and dental care.

The two most common types of Medicare Advantage plans are health maintenance organization (HMO) plans and preferred provider organization (PPO) plans.

HMOs are more restrictive than PPOs. Additionally, most HMOs require a referral from your primary care doctor in order to see a specialist.

These restrictions and limitations present access challenges for Medicare Advantage beneficiaries in rural areas — where health care options may be scarce.

According to a March 2021 policy brief from the WWAMI Rural Health Research Center at the University of Washington, the number of general surgeons in rural areas declined by 29.1 percent from 2001 to 2019. Small and isolated rural areas experienced a decline of 32.6 percent.

The per capita supply of general surgeons in the U.S. overall declined from 6.4 per 100,000 members of the population to 5.2 during that same period — a decrease of 18 percent.

“Given that the construction of plan networks is one of the most important ways that MA plans control costs, without a robust set of providers in rural areas to choose from, plans may face challenges becoming profitable,” Park said. “Loan repayment or forgiveness programs for providers who work in rural areas may help with this.”

Park said another option could be to address access constraints by utilizing telehealth.

In part to the COVID-19 pandemic, Medicare Advantage plans have been given greater flexibility to cover telehealth services in their benefits packages.

However, expansion of telehealth services wasn’t as common in rural areas. Park said this was likely because of “limited financial and technological support.”

“Since telehealth can only be expanded to rural areas as internet connections allow, it is unlikely that telehealth offerings by plans will substantially change outcomes for rural enrollees in the short-term” Park said. “Thus, funding telehealth infrastructure and providing technical assistance to support telehealth implementation by MA plans may make providing care in rural areas more manageable.”

Original Medicare with Medigap Is an Alternative

The main benefit of switching to Original Medicare is increased access to care.

According to data from the U.S. Centers for Medicare & Medicaid Services, there were roughly 1.4 million Medicare noninstitutional providers in 2019, including 225,315 primary care physicians.

Most Original Medicare beneficiaries are responsible for their Part B premium, deductibles and coinsurance that add to out-of-pocket costs. Medicare only pays for 80 percent of the Medicare-approved amount for services and treatments.

Adding a Medicare Supplement, or Medigap, plan can cover many of these out-of-pocket costs, making Original Medicare with Medigap an attractive option for beneficiaries with costlier health care needs.

Medigap plans are sold by private insurance companies. The plans work with Original Medicare to fill the “gaps” in coverage. You cannot have a Medicare Advantage plan and a Medigap plan simultaneously.

Under federal regulations, new Medicare beneficiaries can purchase Medigap within six months of turning 65 and enrolling in Medicare.

During this open enrollment period, you cannot be denied coverage and pricing isn’t based on your overall health or preexisting conditions. You are also guaranteed renewal at the same price offered to others each year.

If you wait until after you are 65 to enroll in a Medigap plan, you may be subject to medical underwriting resulting in higher monthly premiums. You also may be denied coverage outright.

A May 2019 study published in Health Affairs shows that the lack of state-level Medigap regulations was associated with higher reenrollment in Medicare Advantage plans among beneficiaries who switched to traditional Medicare. Authors of that study point to coverage denial and/or premium increases as the main factors for switching back.

While Park and her colleagues did not explicitly examine the impact of Medigap on their findings, they did analyze switching rates by state-level Medigap regulations, adjusted for individual health and social factors.

Switching from MA to traditional Medicare was similar among nonrural enrollees regardless of state-specific Medigap regulations. However, there were substantial variations in switching rates among rural beneficiaries.

Rural MA enrollees in states with community rating and guaranteed issues had the lowest switching rate (6.5 percent).

“Monthly premiums for those in states with both community rating and guaranteed issues were especially high, possibly leading to a lower switching rate,” Park said. “This is plausible because, as shown in our study, rural MA enrollees tend to have low-income levels.”