Do People Who Sign Up for Medicare Advantage Plans Have Lower Medicare Spending?
Issue Brief
Medicare Payment Advisory Commission, “Medicare Advantage encounter data,” Presentation to Commissioners, March 7, 2019. Available at: http://www.medpac.gov/docs/default-source/default-document-library/ma-encounter-data-march-2019.pdf
Neuman, Patricia and Gretchen Jacobson. “Medicare Advantage Checkup” New England Journal of Medicine 2018; 379: 2163-2172 Available at: https://www.nejm.org/doi/full/10.1056/NEJMhpr1804089
Medicare Payment Advisory Commission, “Improving risk adjustment in the Medicare program,” June 2014. Available at: http://www.medpac.gov/docs/default-source/reports/jun14_ch02.pdf
Newhouse, Joseph P., J. Michael McWilliams, Mary Price, et al., “Do Medicare Advantage Plans Select Enrollees in Higher Margin Clinical Categories?” Journal of Health Economics. 2013 December; 32(6)
Newhouse, Joseph P., Mary Price, J. Michael McWilliams, et al., “How Much Favorable Selection is Left In Medicare Advantage?” American Journal of Health Economics. 2015 1(1):1-26
McWilliams, J. Michael, John Hsu, and Joseph P. Newhouse, “New Risk-Adjustment System Was Associated With Reduced Favorable Selection In Medicare Advantage,” 2011. Vol. 31, no. 12.
We examined health care service utilization in 2015 among beneficiaries who switched to Medicare Advantage in 2016 vs. those who remained in traditional Medicare. As might be expected based on the finding of lower average spending, we found lower rates of utilization among those who switched to Medicare Advantage. The difference in percent of beneficiaries using services, was largest for Part B drugs, evaluation and management, imaging, tests, and physician visits, respectively. Among beneficiaries who used the specific services, the quantities used were not appreciably different. This analysis was conducted at the bivariate level.
Kaiser Family Foundation, “Medicare Advantage 2019 Spotlight: First Look,” October 2019. Available at: https://www.kff.org/report-section/medicare-advantage-2019-spotlight-first-look-tables/
Raetzman, Susan O., Anika L. Hines, Marguerite L. Barrett, and Zeynal Karaca, “Hospital Stays in Medicare Advantage Plans Versus the Traditional Fee-for-Service Program, 2013,” HCUP Statistical Brief #198. December 2015. Agency for Healthcare Research and Quality, Rockville, MD. http://www.hcup-us.ahrq.gov/reports/statbriefs/sb198-Hospital-Stays-Medicare-Advantage-Versus-Traditional-Medicare.pdf.
Landon, Bruce E., Alan M. Zaslavsky, Robert C. Saunders, et al., “Utilization of Services in Medicare Advantage versus Traditional Medicare since the Passage of the Medicare Modernization Act,” Health Affairs. 2012; 31(12): 2609-2617.
Ayanian, John Z., Landon, Bruce E., Newhouse, Joseph P. et. al. “Analysis of Medicare Advantage HMOs Compared with Traditional Medicare Shows Lower Use of Many Services During 2003-09.” Health Affairs, 31, 12 (December 2012): 1-9.
A recent study found that death rates were initially lower among beneficiaries who enrolled in Medicare Advantage than those who stayed in traditional Medicare but the rates began to converge over time, raising questions about the differences in case mix between traditional Medicare and Medicare Advantage, and how potential overpayments would change over time. See Newhouse, Joseph P., Mary Price, J. Michael McWilliams, et al., “Adjusted Mortality Rates Are Lower For Medicare Advantage Than Traditional Medicare, But The Rates Converge Over Time,” Health Affairs, 38, 4 (April 2019).
Congressional Budget Office, “Medicare Baseline,” April 2018. Available at: https://www.cbo.gov/system/files?file=2018-06/51302-2018-04-medicare.pdf
Kaiser Family Foundation, “A Dozen Facts About Medicare Advantage,” November 2018. Available at: https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage/