A significant portion, 30%, of Medicare beneficiaries are now in Medicare Advantage health plans, which are paid a fixed monthly amount to provide all the benefits available under traditional fee-for-service Medicare, and which often provide beneficiaries with additional coverage and services. Whether the Medicare Advantage plans are overpaid and whether they deliver better care management and quality has been a subject of debate. The Kaiser Family Foundation reviews the evidence on this topic. (KFF Analysis) Older research had suggested that Medicare health plans saved some money, primarily by utilization reductions and had quality equal to that of fee-for-service Medicare, but that enrollees in the plans often had lower satisfaction. The Kaiser review covered 45 newer studies and finds that while the evidence is limited in some respects, overall Medicare Advantage plans are doing an acceptable job.
On most Medicare quality measures, the plans perform better than the quality rendered for fee-for-service beneficiaries, especially on those measures relating to delivery of preventive care. While Medicare Advantage generally gets lower scores from plan members on questions of satisfaction and access, particularly for sicker beneficiaries, the gap with traditional Medicare is narrow. Given that the plans work by limiting members freedom to pick any provider and seek any service, this shouldn’t be unexpected. Medicare Advantage plans do better at preventing avoidable hospitalizations. Care in the health plans is less resource intensive, which helps limit costs, but it is unclear whether this leads to better or worse outcomes. As there is in health care generally, there are significant differences in performance of Medicare Advantage plans across geographies and plan types. More comprehensive updated research would be useful. Newer beneficiaries are more comfortable with being in a health plan so Medicare Advantage penetration will likely continue to grow rapidly. Congress and CMS should turn the entire program into one based on health plans, as that would create more predictable costs, result in most people having more comprehensive benefits and at least provide a platform for more coordinated care, which traditional Medicare does not do.