Medicare Advantage Plan Quality Varies by Premium Cost

Premium costs may not always be representative of Medicare Advantage plan quality, as high-quality plans were found at every premium level, a study published in JAMA Health Forum found.

Healthcare costs, including premiums, deductibles, and out-of-pocket expenses, are usually the leading factor Medicare Advantage members consider when choosing a plan.

RAND researchers used data from the 2017 Medicare Advantage Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, 2017 Healthcare Effectiveness Data and Information Set (HEDIS) data, and 2016 administrative data from CMS to determine if premium amounts impacted Medicare Advantage plan quality.

The CAHPS survey included data from 168,750 Medicare Advantage beneficiaries.

Just over 43 percent of members were in 591 plans with no monthly premium, 35.3 percent were in 693 plans with premiums up to $60, and 15 percent of respondents were in 279 plans with premiums between $60 and $120. The remaining 5.7 percent of members were in 144 plans with monthly premiums of $120 or more.

Beneficiaries under 65 years old, those eligible for Medicare through disability, and dual eligibles were more likely to be enrolled in the two lower-premium plans. Beneficiaries 80 years or older with higher levels of education were more likely to be in the two higher-premium plans.

Beneficiaries in the two higher-premium categories reported better patient experiences compared to those in the lowest-premium category, the report found.

Patient experience scores in plans with $60 to $120 monthly premiums were 1.4 points higher than $0 premium plans. Similarly, scores were 2.2 points higher in plans with premiums of $120 or more.

Adjusted mean patient experiences were similar in the lower-premium plans and increased across the higher-premium plans.

Researchers found variation in patient experiences among plans in the same premium category. The three lower-premium categories saw more plan quality variation than the highest-premium category.

The highest-premium category did not have any very low-quality plans, but there were high-quality plans in every premium category.

According to the HEDIS data, beneficiaries in the two higher-premium categories were more likely to receive recommended care than those in the lowest-premium category.

Like the patient experience scores, the rates of received recommended care were similar in the two lower-premium categories and grew across the two higher-premium categories.

In plans with $60 to $120 premiums, the rate of received recommended care was 1.4 percentage points higher than in $0 premium plans. The rate was 3.3 percentage points higher in plans with premiums of $120 or more.

However, plans with high and low rates of providing recommended care were found in every premium category.

Flu immunization rates also increased as the premium amounts went up.

The HEDIS osteoporosis management measure showed different findings. The rates of receiving this recommended care were lower in the higher-premium plans.

For example, osteoporosis management rates were 6.1 percentage points lower in plans with $120 or more premiums compared to $0 premium plans. The rates were 3.6 percentage points lower in plans with premiums of $60 or less and 6.4 percentage points lower in plans with premiums between $60 and $120.

The study determined that Medicare Advantage plans with higher premiums produced higher-quality care, but the quality differences between those plans and lower-premium plans were minimal.

The relationship between high premiums and quality care may vary. The Medicare Advantage Quality Bonus Program provides bonus payments to plans that meet performance standards. Plans can use these payments to provide additional members benefits or lower monthly premiums.

“If bonuses were to be used by high-quality plans to discount premiums, the associations between premium pricing and plan quality may weaken,” researchers wrote.

However, the study also found variability in quality within premium categories, indicating that premium amounts may not always be associated with plan quality.