Why Seniors Choose Medicare Advantage

by Kayla Connor, Liza Assatourians, Greg Berger

November 30, 2017

Medicare Advantage provider networks offer seniors more options, high value, and better benefits

High-value networks can save lives. Just ask Freddie Sanchez. When the Palm Springs, Calif., resident wasn’t feeling well in January, he went to see a doctor from his Medicare Advantage network who manages and coordinates his medical care. The doctor immediately admitted Freddie to the hospital, where he found he had pneumonia and had a mild heart attack. Freddie received great care and made a full recovery.

Studies show that high-value provider networks, like those used by Freddie and millions of seniors with Medicare Advantage coverage, are key to delivering high-quality, cost-effective care. The use of provider networks is an important difference between Medicare Advantage and traditional Medicare. Thanks to these high-value networks, Medicare Advantage seniors access the care they need and would otherwise not be able to afford.

Here are three things to know about high-value networks:

  • Successful provider network arrangements, developed through an evaluation process that considers criteria including performance on quality measures, can help reduce premiums and promote more affordable coverage options for consumers, according to major findings from a Milliman report. Because these arrangements involve active cooperation and collaboration between health plans and participating providers, they lead to more efficient care management and higher quality of care.
  • Network contracting with hospitals makes Medicare Advantage plans better purchasers of hospital services than the original Medicare fee-for-service (FFS) program, a recent peer-reviewed study found.
  • In the commercial insurance market, high-value provider networks have had a significant impact on premium costs and represent a promising source of future savings, according to another peer-reviewed study.

Despite the well-established success of high-value networks in restraining costs and enhancing quality in the Medicare Advantage program, a recent report by the Kaiser Family Foundation attempted to cast some doubts. It ignored the major impact on costs and improved coordination and efficiency of care that come from Medicare Advantage physician networks. Instead, the report primarily focused on whether seniors who choose MA plans with less broad networks are fully aware of their choices, implying that enrollees lack adequate access to physician care and face financial hardship due to less generous out-of-network coverage.

However, the report provides no data or other evidence to support these concerns. In fact, all available evidence suggests these concerns are unfounded.

Click through our interactive graphic for seven things to know about Medicare Advantage.

What do seniors think? Nine in 10 seniors in Medicare Advantage are highly satisfied with their plans and their choice of providers and preventive care benefits they receive.

What’s more, an overwhelming majority of seniors keep their plans year after year: 90 percent of MA enrollees renew their existing plan during the annual open enrollment period and overall 98 percent of beneficiaries in MA stay in MA each year, according to the Medicare Payment Advisory Commission.

Premiums for Medicare Advantage plans are projected to fall 6 percent in 2018, the third year in a row of lower premiums, according the Centers for Medicare & Medicaid Services (CMS). At the same time, nearly three-quarters of seniors enrolled in MA will be in high-performing plans rated four stars or higher (out of five).

As MA plan offerings continue to grow, high-value networks are just one way health plans create choices for seniors and meet their unique needs.

Satisfaction rates and enrollment decisions strongly confirm that consumers who choose MA plans do so intentionally, have access to the care they need, and receive benefits and services at higher quality and lower cost. With Medicare Advantage, Freddie knows firsthand he has a provider network he can count on.

Kayla Connor is deputy director of Federal Programs, Liza Assatourians is vice president of Federal Programs, and Greg Berger is executive director of Medicare Policy at AHIP.