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Setting The Story Straight On Medicare Advantage

posted by Alicia Caramenico

on April 4, 2016

A recent Kaiser Family Foundation article suggests differences in coverage between private Medicare options, including Medicare Advantage, and traditional Medicare may “disadvantage” seniors enrolled in fee-for-service Medicare. Yet the article fails to acknowledge how the traditional fee-for-service program continues to undermine the care seniors need.

Medicare Advantage plans are able to provide financial protections via out-of-pocket caps and supplemental benefits on top of traditional Medicare benefits not because of “current rules” that favor them, but because Medicare Advantage plans can deliver more cost effective care by virtue of high-value networks of providers, extensive oversight and accountability on quality measures and other elements, and programs that ensure access to care for vulnerable beneficiaries. Seniors overwhelmingly are satisfied with their Medicare Advantage coverage with more than 94 percent happy with the quality care they receive.

Health plans have led the way in developing innovative care models that are keeping beneficiaries out of the hospital while living active lives. Studies demonstrate Medicare Advantage plan enrollees are more likely to receive the care they need such as primary care or coronary bypass operations when recommended by national treatment guidelines and less likely to experience often unnecessary (and painful) procedures such as hip and knee replacements compared to the traditional program.

Also – and this is lost when opponents of the program describe MedPAC findings on the relative costs to taxpayers of the two programs – research is finding plan innovations encouraging better treatment lead to cost reductions throughout Medicare (yes, even the traditional program). A recent Milliman analysis finds if these “spillover” effects are taken into account, Medicare Advantage costs less than traditional Medicare. Therefore, Medicare Advantage plans offer more financial protections because the plans can deliver so much more for around the same cost or less. If the antiquated traditional Medicare program were modified to include out-of-pocket caps, it would be a very significant cost that would be shouldered by beneficiaries and taxpayers. Plus, it would likely set back the continued march toward more innovative, cost effective care.

Lastly, and ironically, the story in the post undercuts its premise by showing why no change in traditional Medicare was needed. The beneficiary found another Medicare Advantage plan in which his surgeon participates. That’s what Medicare Advantage provides – choices of options meeting the different needs of beneficiaries. If anything, the post illustrates why it is so critical to have policies in place that ensure Medicare Advantage remains a vibrant program available to beneficiaries throughout the country.