Do People Who Sign Up for Medicare Advantage Plans Have Lower Medicare Spending?

Table 1. Average Traditional Medicare Spending in 2015 for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, After Adjusting for Health Risk Factors
Characteristics in 2015 People who stayed in TM in 2016 People who switched to MA in 2016 Difference in spending, 2015
Number of people Average Part A & B spending, 2015 Number of people Average Part A & B spending, 2015
Overall 23,714,780 $9,362 443,240 $8,109 $1,253
Age
Under 35 314,880 $8,631 8,220 $7,476 $1,155
35-44 527,740 $8,778 15,020 $7,603 $1,175
45-54 1,030,820 $8,549 36,140 $7,405 $1,144
55-59 801,600 $8,362 31,180 $7,243 $1,119
60-64 904,460 $8,108 41,120 $7,023 $1,085
65-69 3,360,240 $8,365 79,480 $7,246 $1,119
70-74 5,598,560 $9,229 96,280 $7,994 $1,235
75-79 4,341,380 $9,592 63,060 $8,309 $1,284
80-84 3,175,960 $9,687 37,900 $8,391 $1,296
85-89 2,218,880 $9,819 21,260 $8,505 $1,314
90-94 1,089,460 $10,235 10,340 $8,865 $1,370
95 and older 350,800 $11,409 3,240 $9,883 $1,527
Dual eligibility
Non-dual eligible 19,132,740 $9,779 281,300 $8,471 $1,309
Partial dual eligible 1,257,160 $8,536 61,580 $7,394 $1,142
Full dual eligible 3,324,880 $8,681 100,360 $7,520 $1,162
Original reason for eligibility
Disabled 5,757,400 $9,234 190,840 $7,999 $1,236
Aged 17,957,380 $9,471 252,400 $8,204 $1,267
Gender
Female 13,211,740 $9,320 240,420 $8,073 $1,247
Male 10,503,040 $9,500 202,820 $8,229 $1,271
Institutional status
Community resident 13,363,540 $9,684 267,420 $8,388 $1,296
Institutional resident 1,205,040 $13,638 21,880 $11,813 $1,825
Unknown 9,146,200 $7,559 153,940 $6,548 $1,011
Chronic conditions        
Anemia 5,212,220 $11,148 86,360 $9,657 $1,492
Rheumatoid arthritis 7,987,660 $10,244 136,800 $8,873 $1,371
Asthma 2,077,200 $10,534 42,740 $9,125 $1,410
Atrial fibrillation 2,160,960 $10,096 24,240 $8,745 $1,351
Breast or prostate cancer 1,581,540 $12,274 18,920 $10,757 $1,517
COPD 2,767,340 $10,103 54,960 $8,751 $1,352
Congestive heart failure 3,199,460 $8,884 51,220 $7,695 $1,189
Depressive disorders 6,273,440 $9,985 139,940 $8,787 $1,198
Diabetes 6,592,380 $8,013 136,920 $6,941 $1,072
Epilepsy 594,560 $9,403 13,180 $8,145 $1,258
Hypothyroidism 3,865,660 $8,540 57,540 $7,398 $1,143
Ischemic heart disease 6,792,700 $9,314 107,780 $8,068 $1,246
Kidney disease 4,279,460 $9,414 73,760 $8,154 $1,260
Liver disease 790,800 $11,631 17,040 $10,074 $1,556
Mobility impairments 577,820 $12,766 11,120 $11,058 $1,708
Obesity 2,942,860 $9,687 69,620 $8,503 $1,184
Peripheral vascular disease 2,888,480 $9,219 47,420 $7,985 $1,234
Pressure ulcers 993,360 $12,827 16,060 $11,110 $1,716
Schizophrenia 452,120 $10,686 13,840 $9,256 $1,430
Stroke/TIA 907,500 $11,935 15,180 $10,338 $1,597
No. of chronic conditions        
0 4,513,760 $1,687 93,200 $1,461 $226
1 4,483,440 $3,823 82,120 $3,311 $512
2 4,105,140 $5,694 74,140 $4,932 $762
3 3,225,380 $7,701 59,420 $6,670 $1,030
4 2,357,580 $9,846 44,160 $8,529 $1,318
5 1,666,820 $12,173 29,760 $10,544 $1,629
6 1,164,460 $14,436 20,940 $12,504 $1,932
7 801,800 $16,222 14,660 $14,052 $2,171
8 544,880 $18,120 10,040 $15,696 $2,425
9 357,240 $19,197 6,080 $16,628 $2,569
10 or more 494,280 $20,725 8,720 $17,952 $2,773
NOTE: All values shown were risk adjusted using a model similar to the CMS HCC Risk Adjustment Model. Excludes beneficiaries in Puerto Rico and those who enrolled in cost, Medicare Medical Savings Account (MSA), PACE plans, Medicare-Medicaid Plans (MMPs) and employer group health plans. Excludes beneficiaries with end-stage renal disease. Excludes people who died before the end of 2015. Excludes people not enrolled in Medicare prior to 2013. TM is traditional Medicare. MA is Medicare Advantage. Only chronic conditions with at least 10,000 people switching to Medicare Advantage are shown in table.
SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016.
Table 2. Results from Multivariate Regression of Traditional Medicare Spending in 2015 for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, Adjusting for Risk Factors Included in the CMS HCC-Risk Adjustment Model
Coefficients Estimate Std. Error
Intercept 7.109633 0.009402
Switching -0.143651 0.0142682
Gender: Male referent category
Female -0.0110686 0.0117174
Age 0-34 -0.0712961 0.025248
35-44 -0.0163406 0.021451
45-54 -0.0408814 0.0170427
55-59 -0.06427 0.0179617
60-64 -0.0190008 0.017056
65-69 referent category
70-74 0.0873604 0.0095115
75-79 0.1411297 0.0101946
80-84 0.1577402 0.0112485
85-89 0.1494632 0.0130799
90-94 0.1666209 0.018159
95+ 0.3183193 0.0344025
Dual eligibility: Non-duals referent category
Partial duals -0.1038725 0.0282699
Full duals -0.1306216 0.0198355
Community residents referent category
Institutional residents 0.4165534 0.0333449
Missing residency status -0.2392473 0.0071132
Original reason for entitlement: Aged referent category
Disabled -0.0033169 0.0138178
Chronic conditions/HCC codes
Acute MI 0.810567 0.0252134
Anemia 0.3412536 0.0120288
Asthma 0.1515625 0.0151335
Atrial fibrillation 0.1202888 0.0153342
Blindness 0.1981732 0.0244406
Brain injury 0.2645299 0.0313467
Breast or Prostate cancer 0.2771732 0.0132984
Cerebral palsy -0.0489468 0.033602
Chronic kidney disease 0.154923 0.0152935
Colorectal cancer 0.4436472 0.0204056
Congestive heart failure -0.0452462 0.05673
COPD 0.2339984 0.0398189
Cystic fibrosis 0.034797 0.0282677
Depressive disorders 0.0929828 0.0119425
Diabetes -0.1646257 0.0151394
Endometrial cancer 0.4495853 0.0356021
Epilepsy 0.2226373 0.0456154
Hepatitis 0.1817627 0.0225243
Hip/Pelvic fracture 0.9409028 0.0247483
HIV/AIDS 0.0927405 0.0346999
Hypothyroidism -0.1240166 0.0120557
Ischemic heart disease -0.0107028 0.0119693
Leukemia 0.5217791 0.0189631
Liver disease 0.2347011 0.0150768
Lung cancer 0.6364471 0.0232583
Mobility impairments 0.3394306 0.0170233
Multiple sclerosis 0.4343622 0.0308529
Muscular dystrophy 0.7138206 0.0798967
Obesity 0.0173455 0.0123963
Peripheral vascular disease -0.0216004 0.0124903
Personality disorders 0.1777524 0.02434
Pressure ulcers 0.485386 0.0206655
PTSD 0.0428833 0.0225038
Rheumatoid arthritis 0.1957197 0.0116852
Schizophrenia 0.1277205 0.0207238
Spina bifida 0.2069589 0.0493435
Spinal cord injuries 0.4995232 0.0333971
Stroke/TIA 0.2737327 0.0149603
No. of chronic conditions – 0 referent category
1 0.8182002 0.0126207
2 1.21658 0.0228322
3 1.518567 0.0335242
4 1.764325 0.0443301
5 1.976463 0.0551261
6 2.146921 0.0659209
7 2.263623 0.0766949
8 2.374266 0.0874716
9 2.431992 0.0983541
10 or more 2.508572 0.1192487
Interaction terms
Gender and age: 0-34 x female 0.1451276 0.0377312
35-44 x female 0.0114095 0.0303987
45-54 x female 0.0155029 0.0239679
55-59 x female 0.0030464 0.0253859
60-64 x female -0.0209732 0.0240343
70-74 x female -0.0346688 0.0130251
75-79 x female -0.0609598 0.0138234
80-84 x female -0.0728437 0.0150058
85-89 x female -0.034932 0.0169001
90-94 x female 0.0064602 0.0223403
95+ x female -0.0674294 0.0395159
Dual eligibility and institutional status: Full duals x institutional resident -0.1198834 0.0491795
Full duals x missing residency -0.0315702 0.0433176
Partial duals x institutional resident 0.5107559 0.2224101
Partial duals x missing residency -0.5571722 0.0537358
Dual eligibility, institutional status, and original reason for entitlement: -0.1183059 0.0765971
Non-duals x institutional resident x disabled
Non-duals x missing residency x disabled -0.2336562 0.0162378
Full duals x community resident x disabled 0.1227525 0.0263483
Full duals x institutional resident x disabled -0.1656144 0.0392149
Full duals x missing residency x disabled -0.3121091 0.0477308
Partial duals x community resident x disabled 0.059407 0.0349008
Partial duals x institutional resident x disabled -0.522261 0.2330442
Partial duals x missing residency x disabled 0.1359108 0.0591859
Dual eligibility, institutional status, original reason for entitlement, and gender:
Non-duals x institutional resident x aged x female -0.0360198 0.0387172
Non-duals x institutional resident x disabled x female 0.0632813 0.0972535
Non-duals x missing residency x aged x female 0.1022933 0.009524
Non-duals x missing residency x disabled x female 0.2030838 0.0219463
Full duals x community resident x aged x female 0.0253688 0.0238392
Full duals x community resident x disabled x female -0.0109653 0.0235554
Full duals x institutional resident x aged x female -0.0780793 0.036145
Full duals x institutional resident x disabled x female -0.0157271 0.0325536
Full duals x missing residency x aged x female 0.291827 0.0494258
Full duals x missing residency x disabled x female 0.1634248 0.0433238
Partial duals x community resident x aged x female -0.0641133 0.0335277
Partial duals x community resident x disabled x female -0.0105862 0.028095
Partial duals x institutional resident x aged x female -0.37536 0.2447585
Partial duals x institutional resident x disabled x female -0.0201749 0.123955
Partial duals x missing residency x aged x female 0.4419479 0.0623898
Partial duals x missing residency x disabled x female 0.3076511 0.0604882
Original reason for entitlement, CHF: -0.1078823 0.0139239
Aged x CHF
Original reason for entitlement, Disabled x pressure ulcers: 0.321468 0.0158037
Original reason for entitlement, Aged x pressure ulcers 0.485386 0.0206655
Original reason for entitlement, Aged x multiple sclerosis: -0.235861 0.0597826
Aged x multiple sclerosis
No Congestive heart failure x diabetes -0.3146191 0.0121283
Congestive heart failure x No diabetes 0.1646257 0.0151394
No Congestive heart failure x (asthma or COPD or cystic fibrosis) -0.039098 0.0152652
Congestive heart failure x No (asthma or COPD or cystic fibrosis) -0.0093765 0.0194537
No Congestive heart failure x chronic kidney disease -0.0777502 0.0128155
No Congestive heart failure x atrial fibrillation 0.0852685 0.0142362
Congestive heart failure x No atrial fibrillation -0.1202888 0.0153342
Schizophrenia x congestive heart failure 0.1068341 0.0439697
No Schizophrenia x COPD 0.1029918 0.0169278
Schizophrenia x No COPD 0.1277205 0.0207238
Schizophrenia x COPD 0.3617188 0.0429217
Schizophrenia x epilepsy -0.1311777 0.0462925
NOTE: One dollar was added to all spending values to remove zeros. Other regressions included additional chronic conditions, county-level average traditional Medicare spending, and beneficiaries’ race/ethnicity with no meaningful change in results.
SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016.
Table 3. Average Traditional Medicare Spending in 2015, Unadjusted for Health Risk Factors, for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, In Selected Counties
County
(Largest city in the county)
People who stayed in TM in 2016 People who switched to MA in 2016 Difference in spending (unadjusted) Percentage difference in spending, 2015
Number of people Average Part A & B spending, 2015 Number of people Average Part A & B spending, 2015
Allegheny, Pennsylvania (Pittsburgh) 45,820 $9,358 1,440 $11,464 ($2,105) -22%
Baltimore City, Maryland 51,900 $13,413 1,140 $14,831 ($1,418) -11%
Bexar, Texas (San Antonio) 87,360 $8,427 1,720 $7,957 $471 6%
Clark, Nevada (Las Vegas) 104,260 $9,323 3,180 $7,294 $2,029 22%
Cook, Illinois (Chicago) 339,340 $9,629 6,040 $6,653 $2,976 31%
Cuyahoga, Ohio (Cleveland) 80,740 $8,941 2,160 $5,312 $3,629 41%
Erie, New York (Buffalo) 43,720 $7,992 1,300 $9,489 ($1,498) -19%
Fulton, Georgia (Atlanta) 39,480 $7,930 1,660 $6,903 $1,027 13%
Harris, Texas (Houston) 157,860 $10,134 5,040 $7,725 $2,409 24%
King, Washington (Seattle) 113,020 $8,044 2,820 $6,029 $2,015 25%
Los Angeles, California 322,160 $11,719 5,300 $5,440 $6,278 54%
Marion, Indiana (Indianapolis) 65,580 $9,084 2,720 $9,597 ($513) -6%
Mecklenburg, North Carolina (Charlotte) 53,760 $7,835 1,560 $11,907 ($4,072) -52%
Miami Dade, Florida (Miami) 87,920 $12,523 4,940 $8,819 $3,704 30%
Milwaukee, Wisconsin 51,820 $9,217 2,320 $9,007 $210 2%
Multnomah, Oregon (Portland) 25,800 $9,216 1,080 $12,434 ($3,218) -35%
Queens, New York (New York City) 102,980 $11,460 3,880 $12,328 ($868) -8%
Salt Lake, Utah 41,720 $8,418 1,220 $6,296 $2,122 25%
San Bernardino, California 46,720 $9,576 1,440 $5,150 $4,426 46%
Wayne, Michigan (Detroit) 125,520 $11,272 1,600 $8,260 $3,012 27%
NOTE: Excludes beneficiaries in Puerto Rico and those who enrolled in cost, Medicare Medical Savings Account (MSA), PACE plans, Medicare-Medicaid Plans (MMPs) and employer group health plans. Excludes beneficiaries with end-stage renal disease. Excludes people who died before the end of 2015. Excludes people not enrolled in Medicare prior to 2013. TM is traditional Medicare. MA is Medicare Advantage.
SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016.
Table 4. Average Traditional Medicare Spending in 2015 for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, Unadjusted for Health Risk Factors
Characteristics in 2015 People who stayed in TM in 2016 People who switched to MA in 2016 Difference in spending Percentage difference in spending
Number of people Average Part A & B spending, 2015 Number of people Average Part A & B spending, 2015
Overall 23,714,780 $8,859 443,240 $7,628 $1,231 14%
Age
Under 65 3,579,500 $8,431 131,680 $8,461 -$30 0%
65-69 3,360,240 $6,900 79,480 $6,084 $815 12%
70-74 5,598,560 $7,341 96,280 $5,915 $1,426 19%
75-79 4,341,380 $8,792 63,060 $7,469 $1,323 15%
80 and older 6,835,100 $11,327 72,740 $10,347 $980 9%
Dual eligibility
Full dual eligible 3,324,880 $12,951 100,360 $12,310 $641 5%
Partial dual eligible 1,257,160 $9,220 61,580 $8,565 $654 7%
Non-dual eligible 19,132,740 $8,122 281,300 $5,788 $2,335 29%
Gender
Female 13,211,740 $9,071 240,420 $8,185 $887 10%
Male 10,503,040 $8,588 202,820 $7,017 $1,572 18%
Chronic conditions        
Anemia 5,212,220 $20,958 86,360 $20,026 $932 4%
Rheumatoid Arthritis 7,987,660 $14,133 136,800 $12,960 $1,173 8%
Asthma 2,077,200 $22,438 42,740 $19,451 $2,986 13%
Atrial fibrillation 1,581,540 $15,181 18,920 $13,531 $1,650 11%
Breast or prostate cancer 2,160,960 $20,359 24,240 $20,502 -$143 -1%
COPD 3,199,460 $23,280 51,220 $22,306 $975 4%
Congestive heart failure 2,767,340 $21,551 54,960 $18,925 $2,626 12%
Depressive disorders 6,273,440 $15,846 139,940 $13,779 $2,067 13%
Diabetes 6,592,380 $12,749 136,920 $10,973 $1,776 14%
Epilepsy 4,279,460 $19,836 73,760 $18,556 $1,281 6%
Hypothyroidism 3,865,660 $13,668 57,540 $12,931 $737 5%
Ischemic heart disease 6,792,700 $15,853 107,780 $15,162 $691 4%
Kidney Disease 594,560 $20,993 13,180 $18,447 $2,547 12%
Liver disease 790,800 $21,789 17,040 $19,090 $2,699 12%
Mobility impairments 577,820 $32,279 11,120 $29,137 $3,142 10%
Obesity 2,942,860 $16,436 69,620 $14,545 $1,892 12%
Peripheral vascular disease 2,888,480 $19,606 47,420 $18,489 $1,118 6%
Pressure ulcers 452,120 $15,314 13,840 $15,335 -$21 0%
Schizophrenia 993,360 $31,390 16,060 $31,312 $78 0%
Stroke/TIA 907,500 $26,581 15,180 $25,888 $694 3%
NOTE: Values have not been adjusted for differences in health status and other risk factors. Excludes beneficiaries in Puerto Rico and those who enrolled in cost, Medicare Medical Savings Account (MSA), PACE plans, Medicare-Medicaid Plans (MMPs) and employer group health plans. Excludes beneficiaries with end-stage renal disease. Excludes people who died before the end of 2015. Excludes people not enrolled in Medicare prior to 2013. TM is traditional Medicare. MA is Medicare Advantage. Only chronic conditions with at least 10,000 people switching to Medicare Advantage are shown in table.
SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016.
Methods