Additional Coverage:
- Private Medicare Plans Are Denying Rehab Care at Alarming Rates, New Analysis Shows (financebuzz.com)
A recent government report has raised concerns about how Medicare Advantage plans handle requests for post-hospital care, revealing that these plans often deny coverage for rehabilitation and long-term care at alarming rates. This has sparked criticism from senior advocates who argue that private insurers are prioritizing cost-cutting over the health needs of older adults.
Key Takeaways for Medicare Advantage Enrollees
If you or a family member rely on a Medicare Advantage plan, especially when facing hospitalization, understanding how these plans manage coverage requests is crucial. Many seniors depend on these plans to bridge healthcare costs during retirement, but challenges with accessing necessary care post-hospitalization can complicate recovery.
What the Report Found
The June 2026 report from the Department of Health and Human Services’ Office of Inspector General (OIG) examined denial rates for post-acute care requests submitted to major Medicare Advantage providers. Although Medicare is a federal program, Medicare Advantage plans are administered by private insurers, with CVS Health/Aetna, Humana, and UnitedHealth Group being the largest players.
The report showed these three companies denied more than half of all requests for long-term care or rehabilitation services. Specifically, CVS Health rejected 80% of long-term care requests, while Humana and UnitedHealth denied over 70%. In contrast, smaller providers denied around 42% of such requests.
Rehabilitation care denials were also significant, with UnitedHealth rejecting 66% of rehabilitation requests and both Humana and CVS Health/Aetna denying over half. Erin Bliss, Assistant Inspector General for the Department, described these denial rates as “pretty shocking.”
Who Is Most Impacted?
Seniors requiring extended care after hospital stays-such as rehabilitation centers, skilled nursing facilities, or long-term care hospitals-face the brunt of these denials. These individuals often need specialized support following serious medical events like strokes, heart attacks, or fractures, making a safe return home difficult without proper care. The high denial rates mean many are being left without the assistance they need during critical recovery periods.
The Cost Factor
Post-hospital care costs vary widely. Long-term care hospitals average about $49,000 per stay, rehabilitation facilities around $24,000, and skilled nursing roughly $16,000.
Home-based care is less expensive, averaging $6,000. While costly, rehabilitation and skilled nursing care can reduce hospital readmissions-potentially lowering overall expenses.
For example, collaborations between hospitals and skilled nursing facilities have led to notable declines in readmission rates, such as a 20% drop at Mount Sinai.
Understanding Prior Authorization
Medicare Advantage plans require prior authorization for most high-cost services. This means healthcare providers must submit documentation proving the medical necessity of treatments before they are approved. While insurers argue that this system helps prevent unnecessary care and contain costs, critics say it’s often used as a gatekeeping tool to deny needed services.
Senate Investigation Highlights Concerns
A 2024 Senate investigation found evidence that Medicare Advantage companies deliberately used prior authorization to limit access to post-acute care. Between 2019 and 2022, denial rates for post-hospital care requests by UnitedHealthcare, CVS, and Humana were significantly higher than denials for other types of care.
UnitedHealth’s denial rate for post-acute services rose from 8.7% to 22.7%, with a ninefold increase in denials for skilled nursing home care. The report linked these trends to the use of AI-driven tools like nH Predict and CVS’s “Post-Acute Analytics” project aimed at reducing spending.
What This Means for Seniors
Medicare Advantage enrollees may find it more difficult to get approval for necessary post-hospital care compared to those on traditional Medicare plans. Compounding this, the current administration has paused enforcement of health equity analyses related to prior authorization, reducing oversight.
It’s vital to understand your plan’s prior authorization process before an urgent health situation arises. Importantly, the OIG report highlights that appealing denials can be effective: although few denials are appealed, most appeals succeed.
For skilled nursing facility requests, 95% of appeals overturned initial denials. Knowing how to navigate this appeals process can be critical in securing needed care.
Practical Money Tips for Seniors
Whether managing healthcare costs or general finances, there are ways to improve your financial well-being:
- Boost Your Income: Consider side gigs or other income sources that fit your lifestyle.
- Grow Your Savings: Time and compound interest are powerful-starting with a clear financial plan helps.
- Maximize Benefits: Take advantage of senior discounts and shop smart, such as comparing auto insurance rates to save hundreds annually.
- Avoid Financial Pitfalls: Stay alert to common traps that quietly drain resources.
Being informed and proactive can help seniors navigate both healthcare and financial challenges more effectively during retirement.