The FACTS About Medicare Advantage

Medicare Advantage Beneficiaries Receiving High Quality Care

  • Medicare beneficiaries continue to choose Medicare Advantage coverage because these plans have lower out-of-pocket costs and offer innovative services, such as care coordination, that improve the quality and safety of patient care.
  • There is an increasing amount of evidence showing that seniors in Medicare Advantage receive higher quality care compared to seniors in the fee-for-service part of Medicare.  In fact, a study in the January edition of Health Affairs found that seniors with diabetes in a Medicare Advantage special-needs plan had “seven percent more primary care physician office visits; nine percent lower hospital admission rates; 19 percent fewer hospital days; and 28 percent fewer hospital readmissions compared to patients in FFS Medicare.”
  • The Health Affairs study follows a series of studies by AHIP researchers comparing patterns of care among patients with Medicare Advantage coverage and in the FFS Medicare program. The most recent report, based on an analysis of hospital discharge datasets provided by the Agency for Healthcare Research and Quality (AHRQ) as well as state discharge data acquired directly from the states of Pennsylvania and Texas, estimated risk-adjusted readmission rates were about 27-29 percent lower in Medicare Advantage than Medicare FFS per enrollee, 16-18 percent lower per person with an admission, and14-17 percent lower as measured per hospitalization.
  • AHIP recently hosted a briefing on Capitol Hill where several Medicare health plans highlighted the innovative ways they are improving the health and well-being of Medicare and Medicaid beneficiaries with complex health conditions.  Those presentations are available here: http://www.ahip.org/AHIPResearch/.

The ACA Includes $200 Billion in Cuts and New Taxes That Will Put at Risk Beneficiaries’ Medicare Advantage Coverage

  • In their March 2011 baseline, the Congressional Budget Office projected that the Medicare Advantage cuts will have the following impact:
  • CBO is projecting MA enrollment declines from 11.7 million enrollees in 2011 to 7.5 million in 2018 and 7.8 million in 2019.
  • CBO is projecting MA enrollment as a percentage of total MA enrollment decreases from 24% today to 13% in 2019.

  • The new premium tax included in the ACA will also impact beneficiaries in Medicare Advantage.   A new technical analysis by Oliver Wyman estimates the impact of the new tax on insurance market segments and public programs:
  • Impact on Medicare Advantage beneficiaries: Increase costs $16 to $20 per member per month in 2014 and will increase to between $32 and $42 by 2023, with an average expected increase in the cost of Medicare Advantage coverage of $3,590 over ten years.

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