TOPLINES
·
Enrollment in private
Medicare Advantage plans is projected to overtake traditional Medicare
enrollment over the next decade. How do these plans compare to traditional
Medicare?
·
Beneficiaries in
traditional Medicare and Medicare Advantage have similar demographics, report
comparable levels of chronic illness, and experience the same monthlong wait
times for medical care
AUTHORS Gretchen Jacobson, Aimee Cicchiello, Janet P. Sutton, Arnav Shah
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Abstract
·
Issue: Enrollment in Medicare Advantage
plans continues to increase rapidly. This has led to questions about which
beneficiaries are enrolling in Medicare Advantage or in traditional Medicare
and how their health care experiences compare.
·
Goal: To assess the characteristics and experiences of
beneficiaries in Medicare Advantage and traditional Medicare.
·
Methods: Analysis of data from the 2018
Medicare Current Beneficiary Survey and the Commonwealth Fund 2021
International Health Policy Survey of Older Adults. Beneficiaries in Special
Needs Plans (SNPs) were examined separately where sample sizes were sufficient.
·
Key Findings: Medicare Advantage enrollees do not
differ significantly from beneficiaries in traditional Medicare in terms of
their age, race, income, chronic conditions, satisfaction with care, or access
to care, after excluding SNP enrollees. Both groups reported waiting more than
a month for physician office visits. Similar shares of Medicare Advantage and
traditional Medicare enrollees report that their out-of-pocket costs make it
difficult to obtain care.
·
Conclusions: Medicare Advantage and traditional
Medicare are serving similar populations, with beneficiaries having comparable
health care experiences. The care management services provided by Medicare Advantage
plans appear to neither impede access to care nor reduce concerns about costs.
Overall, the analysis highlights substantial barriers to care that all
beneficiaries seem to be experiencing.
Introduction
Medicare beneficiaries
can choose whether to receive their benefits from traditional Medicare or
Medicare Advantage plans, which are offered by private insurers. These plans
have experienced a surge in enrollment over the past decade, and half of
beneficiaries are projected to be enrolled in a private Medicare Advantage plan
by 2025.1 Medicare Advantage plans also
have been paid more, on average, than what it costs to cover similar
beneficiaries in traditional Medicare.2 As Medicare Advantage enrollment
continues to grow, it is critical to examine the experiences of beneficiaries
to ensure equity among beneficiaries and value for the Medicare program.
Traditional Medicare
and Medicare Advantage: A Historic Divide
Beneficiaries weigh
considerable trade-offs when deciding whether to enroll in Medicare Advantage
plans or traditional Medicare. Unlike the latter, Medicare Advantage plans are
required to place limits on enrollees’ out-of-pocket spending and to maintain
provider networks.3 The plans also can provide
benefits not covered by traditional Medicare, such as eyeglasses, fitness
benefits, and hearing aids. Medicare Advantage plans are intended to manage and
coordinate beneficiaries’ care. Some Medicare Advantage plans specialize in
care for people with diabetes and other common chronic conditions, including
Special Needs Plans (SNPs); SNPs also focus on people who are eligible for both
Medicare and Medicaid and those who require an institutional level of care.
Traditional Medicare and
Medicare Advantage enrollees have historically had different characteristics,
with Medicare Advantage enrollees somewhat healthier.4 Black and Hispanic beneficiaries
and those with lower incomes have tended to enroll in Medicare Advantage plans
at higher rates than others.5 Traditional Medicare has
historically performed better on beneficiary-reported metrics, such as provider
access, ease of getting needed care, and overall care experience.6
This issue brief examines
the characteristics and experiences of Medicare Advantage enrollees relative to
beneficiaries in traditional Medicare, using the most recent available data
from the 2018 Medicare Current Beneficiary Survey fielded by the Centers for
Medicare and Medicaid Services. It examines SNPs separately from other Medicare
Advantage plans when sample sizes are sufficient, with an eye toward
understanding how the experiences of SNP populations differ from those of other
beneficiaries. The analysis also includes data from the Commonwealth Fund 2021
International Health Policy Survey of Older Adults, which surveyed a sample of
1,609 individuals over age 65 in the U.S. between March and May of 2021.7
Findings
Beneficiaries Enrolled
in Medicare Advantage and Traditional Medicare Look Similar, After Separating
Out SNPs
After excluding
beneficiaries in SNPs, beneficiaries enrolled in traditional Medicare do not
differ significantly from Medicare Advantage enrollees on age, income, or
receipt of a Part D low-income subsidy (LIS), which helps low-income
individuals pay for prescription drugs (Exhibit 1). However, beneficiaries in
traditional Medicare are significantly more likely than Medicare Advantage
enrollees to reside in a nonmetropolitan area, as well as more likely to live
in a long-term-care or residential facility.
Beneficiaries in SNPs are
different. Given the eligibility criteria for these plans, it is not surprising
that enrollees tend to have significantly lower incomes and a greater
likelihood of receiving Medicaid benefits or LIS than other Medicare
beneficiaries. Enrollment in SNPs for people who require an institutional level
of care has been growing rapidly, leading to a similar share of SNP enrollees
and beneficiaries in traditional Medicare living in a long-term-care facility.8
Racial/ethnic
distribution of enrollees. The racial and ethnic distribution of
beneficiaries in traditional Medicare and Medicare Advantage is similar, after
separating SNPs from other Medicare Advantage plans (Exhibit 2). Most
beneficiaries in traditional Medicare and Medicare Advantage plans identify as
white. However, SNP enrollees are significantly more likely to identify as
Hispanic or Black.
When SNPs are included,
about 13 percent of all Medicare Advantage enrollees identify as Black and
approximately 10 percent identify as Hispanic, compared to 8 percent and 6
percent, respectively, of beneficiaries in traditional Medicare.
Chronic conditions. On average, the
number of chronic conditions per beneficiary is relatively similar between
traditional Medicare and non-SNP Medicare Advantage plans (Exhibit 3). Not
surprisingly given eligibility criteria, the average number of chronic
conditions is higher among beneficiaries in SNPs than among those with other
types of Medicare coverage. Half of beneficiaries in SNPs have been diagnosed
with six or more chronic conditions, compared with fewer than a third of
beneficiaries in traditional Medicare and other types of Medicare Advantage
plans.
After excluding SNPs,
beneficiaries in traditional Medicare and Medicare Advantage do not differ with
respect to the prevalence of chronic conditions (Exhibit 4). However, the
prevalence of many chronic conditions is significantly higher among SNP
enrollees, likely a reflection of the plans’ eligibility criteria. For example,
more than half of SNP enrollees have diabetes, compared to about a third of
enrollees in other Medicare Advantage plans or beneficiaries in traditional
Medicare. Conversely, only about a quarter of SNP enrollees have been diagnosed
with cancer versus more than a third of beneficiaries in other Medicare
Advantage plans and in traditional Medicare.
Traditional Medicare
and Medicare Advantage Enrollees Report Similar Difficulties Accessing Care
Cost as a barrier to
care. A
similar share of beneficiaries in traditional Medicare and Medicare Advantage
plans report problems obtaining needed health care.
High cost is among the
most frequently reported reasons for not getting needed care, followed by
exclusion of a service from coverage (Exhibit 5). Relatively small shares of
enrollees with either type of coverage reported problems with finding a
specialist.
People with mental health
conditions. A
higher percentage of beneficiaries with a mental health condition than without
one reported difficulty obtaining needed health care (11% vs. 4%, respectively)
(data not shown). The proportion of beneficiaries with mental health conditions
reporting access difficulties did not differ significantly by type of coverage.
Wait times. Wait times for
hospital outpatient and physician office visits are similarly long for
traditional Medicare and Medicare Advantage, averaging about three weeks for a
hospital outpatient visit and over one month for a physician office appointment
(data not shown). Waits were similar among those with mental health conditions
and other common conditions.
Satisfaction with care. Regardless of
coverage type, overwhelming majorities of Medicare beneficiaries in both
traditional Medicare and Medicare Advantage report satisfaction with care
(Exhibit 6).
Care Management
Appears Somewhat Better for Beneficiaries in Medicare Advantage Plans Than for
Beneficiaries in Traditional Medicare
Self-management of
conditions. Across
both types of Medicare coverage, most people age 65 and older said they felt
confident they could manage and control their own health conditions (see Appendix). A somewhat larger share of people
with diabetes in Medicare Advantage plans than people with diabetes in traditional
Medicare felt confident they could manage their health conditions.
Among people age 65 and
older with a health condition, a somewhat larger, though not statistically
significantly different, share of those in Medicare Advantage plans than those
in traditional Medicare that said they had a treatment plan for their
condition. A larger share of Medicare Advantage enrollees said that a health
care professional had given them clear instructions about symptoms to monitor
and had discussed their priorities in caring for the condition (see Appendix).
Self-care among people
with diabetes. Among
beneficiaries with diabetes, no significant difference was observed by type of
Medicare coverage in the proportion reporting their blood sugar was under
control (Exhibit 7).9 While a larger share of SNP
enrollees with diabetes engaged in self-care behaviors than their counterparts
in other Medicare Advantage plans or traditional Medicare, the differences did
not meet the statistical test for significance (Exhibit 8).
Prescription drug review. Older adults taking
multiple medications may be susceptible to medication-related problems; having
a health care professional review their medications can prevent harmful
interactions and reduce the number of drugs prescribed. Among adults age 65 and
older, a somewhat larger share of Medicare Advantage enrollees than
beneficiaries in traditional Medicare reported having a health care
professional review their medications in the past year. However, among
beneficiaries with cancer and those with high needs and high costs — people who
often take many medications — the share who had their medications reviewed did
not significantly differ by type of coverage (see Appendix).
Usual source of care. Having a usual
source of care has been found to improve quality and reduce unnecessary care.
The majority of people age 65 and older reported having a usual provider or
place where they receive care, with slightly higher rates among people in
Medicare Advantage plans, people with diabetes, and people with high needs
(see Appendix).
Providers coordinating
care and responding to medical concerns. People age 65 and older with diabetes
in Medicare Advantage plans were slightly more likely than those in the same
group in traditional Medicare to report that their doctor’s practice always or
often helped them coordinate or arrange their care with other providers. There
were not statistically significant differences in the share of older adults in
Medicare Advantage plans reporting that they would always or often receive an
answer about a medical concern the same day they contacted their usual source
of care compared to those in traditional Medicare (see Appendix). A larger share of older adults in
Medicare Advantage plans had a health care professional they could easily
contact in between doctor visits for advice about their health condition (data
not shown).
Hospital discharge
information. Hospitalization
rates in the previous two years for people age 65 and older were similar by
type of Medicare coverage (28% for Medicare Advantage vs. 27% for traditional
Medicare) (data not shown). A somewhat larger share of Medicare Advantage
enrollees than beneficiaries in traditional Medicare received written
information on what to do and what symptoms to watch when they returned home
(see Appendix).
Management of emergency
department use. The
percentage of people age 65 and older who had an emergency department visit in
the previous two years did not differ by type of Medicare coverage (34% for
both Medicare Advantage and traditional Medicare) (data not shown). The share
of older adults who reported their emergency department visit could have been
treated by their usual source of care did not differ by type of coverage
(see Appendix).
Policy Implications
Historically, Medicare
Advantage beneficiaries have been healthier than those in the traditional
program, but this seems to be changing: beneficiaries now have similar
characteristics and experiences regardless of coverage. Our analysis also shows
that SNPs are serving a disproportionately larger share of lower-income
beneficiaries who are Black or Hispanic.
These findings highlight
the importance of separating SNPs from other Medicare Advantage plans when
evaluating plan performance and considering policy changes. SNPs serve a
particularly vulnerable population, including many people with serious health
conditions or low incomes. Analyses by the Medicare Payment Advisory Commission
(MedPAC) have shown that, on average, these plans have lower medical loss ratios
(suggesting higher profits) than other types of Medicare Advantage plans.10 This indicates that insurers’
interest in serving these populations will likely continue to grow. The
findings also raises the imperative to examine these plans separately from
other Medicare Advantage plans in order to ensure high-quality, equitable care.
There are some areas in
which Medicare Advantage plans appear to perform better than traditional
Medicare. In particular, Medicare Advantage enrollees are more likely than
those in traditional Medicare to have a treatment plan, to have someone who
reviews their prescriptions, and to have a regular doctor or place of care. By
providing this additional help, Medicare Advantage plans are making it easier
for enrollees to get the help they need to manage their health care conditions.
Medicare experts have suggested providing a similar service to beneficiaries in
traditional Medicare through care coordinators.11
The survey results also
raise questions about whether Medicare Advantage plans are receiving
appropriate payments. MedPAC estimates that plans are paid 4 percent more than
it would cost to cover similar people in traditional Medicare.12 On the one hand, Medicare
Advantage plans seem to be providing services that help their enrollees manage
their care, and this added care management could be of significant value to both
plan enrollees and the Medicare program. On the other hand, rates of
hospitalizations and emergency room visits are similar for beneficiaries in
Medicare Advantage plans and traditional Medicare — outcomes that call into
question the impact of the added services on health care use, spending, and
outcomes.
Paying Medicare Advantage
plans appropriately and fairly is important not only to their enrollees but
also to beneficiaries in traditional Medicare, since higher payments to plans
raise Part B premiums for all beneficiaries and erode the solvency of the
Medicare Hospital Insurance Trust Fund.13 With Medicare Advantage
enrollment projected to overtake traditional Medicare enrollment over the next
decade, maintaining sufficient coverage choices and facilitating innovation — while also
ensuring that Medicare Advantage plans provide efficient, effective, and
equitable care — will remain a challenging balancing act.
The authors thank
Angelina Lee, Kevin Neipp, and Helen Liu at Westat for their contributions in
data programming, and Willow Burns, also from Westat, for her contributions to
the preparation of charts and graphics. The authors also would like to thank
Robyn Rapoport, Sarah Glancey, Rob Manley, and Christian Kline of SSRS, as well
as Chris Hollander, Jen Wilson, and Paul Frame of the Commonwealth Fund.
NOTES
1.
“Medicare Data Hub,” Commonwealth Fund;
accessed Sept. 2021.
2.
Medicare
Payment Advisory Commission, Report to the
Congress: Medicare and the Health Care Delivery System (MedPAC,
June 2021).
3.
Gretchen
Jacobson et al., Medicare
Advantage: How Robust Are Plans’ Physician Networks? (Henry
J. Kaiser Family Foundation, Oct. 2017).
4.
Gerald
Riley et al., “Health Status of Medicare Enrollees in HMOs and
Fee-for-Service in 1994,” Health Care Financing Review 17,
no. 4 (Summer 1996): 65–76; and Stephanie L. Shimada et al., “Market and Beneficiary Characteristics Associated with
Enrollment in Medicare Managed Care Plans and Fee-for-Service,” Medical
Care 47, no. 5 (May 2009): 517–23.
5.
Shimada
et al., “Market and Beneficiary Characteristics,” 2009.
6.
Marsha
Gold and Giselle Casillas, What Do We Know
About Health Care Access and Quality in Medicare Advantage Versus the
Traditional Medicare Program? (Henry J. Kaiser Family
Foundation, Nov. 2014); Bruce E. Landon et al., “Comparison of Performance of Traditional Medicare vs.
Medicare Managed Care,” JAMA 291, no. 14 (Apr. 14,
2004): 1744–52; and Patricia S. Keenan et al., “Quality Assessments by Sick and Healthy Beneficiaries in
Traditional Medicare and Medicare Managed Care,” Medical
Care 47, no. 8 (Aug. 2009): 882–88.
7.
We
used two questions to categorize U.S. respondents as having either Medicare
Advantage or traditional Medicare. A total of 1,487 respondents indicated they
have Medicare: 675 said that they receive their Medicare benefits through a
Medicare Advantage plan, and the remaining 812 respondents were grouped as
having traditional Medicare.
9.
Matthew
Reaney, Peter Black, and Chad Gwaltney, “A Systematic Method for Selecting Patient-Reported
Outcome Measures in Diabetes Research,” Diabetes Spectrum 27,
no. 4 (Nov. 2014): 229–32.
10. MedPAC, Medicare
and the Health Care Delivery System, 2021.
11. Kathleen A. Buto, “Patient Empowerment and Medicare Solvency,” To
the Point (blog), Commonwealth Fund, Jan. 28, 2021.
12. Medicare Payment Advisory
Commission, “Chapter 12: The Medicare Advantage Program: Status Report,”
in Report to the Congress: Medicare Payment Policy (MedPAC,
Mar. 2021).
13. “Medicare Solvency,” Commonwealth Fund, 2021.
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