Private health plans have a strong track record of offering high quality coverage options, with innovative programs and services to serve the Medicare population. Currently, more than 13 million seniors and people with disabilities have chosen to enroll in Medicare Advantage plans because they value the improved quality of care, additional benefits, and innovative services these plans provide. As a result of health plans’ efforts, survey findings show that 88 percent of Medicare Advantage enrollees are satisfied with their coverage overall and 92 percent are satisfied with their doctor.
As policymakers consider how to sustain Medicare in the future, health plans are collaborating with providers and other stakeholders to help transform the health care system through innovative payment and delivery system reforms, critical components to ensuring that our nation’s public safety net continues to protect patients and is sustainable in the long run.
The Value Offered by Health Plans Participating in the Medicare Advantage Program
- MA Enrollees Receive Coordinated Care: Seniors and people with disabilities are choosing Medicare Advantage plans because they have developed systems of coordinated care for ensuring that beneficiaries receive health care services on a timely basis, while also emphasizing prevention and providing access to disease management services for their chronic conditions. These coordinated care systems provide for the seamless delivery of health care services across the continuum of care.
- MA Enrollees Receive Additional Services: The following are additional specific examples of the extra benefits and services that are not included in the Medicare FFS program, but are offered by Medicare Advantage plans to improve enrollees’ coverage and manage their overall health and well-being on an ongoing basis:
- Case management services
- Disease management programs
- Coordinated care programs
- Prescription drug management tools integrated with medical benefits
- Tools and data collection to address disparities in care for racial and ethnic minorities
- Nurse help hotlines
- Enhanced coverage of home infusion, personal care and durable medical equipment
- Personal health records to offer beneficiaries greater control over their health information and to coordinate information better
- Vision, hearing, and dental benefits coordinated with medical services
- Peer Reviewed Studies Show the Value of Medicare Advantage: As a direct result of these additional benefits and services, peer reviewed research has demonstrated that Medicare Advantage plans are more effective than the Medicare FFS program at addressing crucial patient care issues facing the nation, including reducing preventable hospital readmissions, increasing primary care visits, and managing chronic illnesses. The following are several examples:
- One recent study published in the American Journal of Managed Care (AJMC) found that the Medicare Advantage readmission rate was about 13 percent to 20 percent lower than that in the Medicare FFS program.
- A study published in the January 2012 edition of Health Affairs found that beneficiaries with diabetes in a Medicare Advantage special needs plan (SNP) 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.”
- Additional research co-authored by researchers affiliated with The Brookings Institution concluded that Medicare Advantage plans outperformed the Medicare FFS program in 9 out of 11 clinical quality measures. This means that Medicare Advantage enrollees received the level of effective care recommended by a doctor with greater frequency than patients in Medicare FFS, for 9 of the 11 procedures studied.
- MA Enrollees Are Protected Against Unpredictable Out-of-Pocket Costs: Medicare Advantage plans also protect beneficiaries from catastrophic health care costs. In 2012, all Medicare Advantage plans offer an out-of-pocket maximum limit for beneficiary costs, and about 78 percent of Medicare Advantage enrollees are in plans that have annual out-of-pocket maximums of $5,000 or less. These out-of-pocket maximums – which are not offered by the Medicare FFS program – help protect Medicare beneficiaries from catastrophic health care expenses that otherwise might pose a serious threat to their financial security. Medicare Advantage plans also help reduce out-of-pocket costs for enrollees by reducing premiums for Part B and Part D, and by limiting cost-sharing for Medicare-covered services, including primary care physician visits and inpatient hospital stays.
- Impact on Vulnerable Beneficiaries: For years, AHIP has been tracking government data that show how valuable Medicare Advantage plans are for vulnerable beneficiaries, particularly those who are not eligible for Medicaid and do not have employer-sponsored retiree benefits. For many of these individuals, Medicare Advantage may be their only option for comprehensive, affordable coverage. Key findings of our most recent analysis, based on 2010 data and published in May 2012, show that:
- Thirty-nine percent of all Medicare beneficiaries had incomes below $20,000. By comparison, 43 percent of Medicare Advantage enrollees had incomes below $20,000.
- Sixty-four percent of African-American Medicare Advantage enrollees and 82 percent of Hispanic Medicare Advantage enrollees had incomes below $20,000.
- These findings demonstrate that Medicare Advantage plans are important to many beneficiaries who cannot afford the high out-of-pocket costs they would incur under the Medicare FFS program. These vulnerable beneficiaries will pay a heavy price if the ACA’s Medicare Advantage funding cuts are fully implemented.