Medicare Advantage Plans Increase, Improve Quality Over FFS Plans

The number of Medicare Advantage plans is increasing, while typically being of higher quality and yielding more cost-savings as opposed to fee-for-service Medicare, Better Medicare Alliance argued in its State of Medicare Advantage report.

Medicare Advantage has become almost ubiquitous in the US, with the number of plans jumping 49 percent since 2017. On average, there are 39 plans available per county.

This increased volume means that nearly all Medicare beneficiaries can access at least one Medicare Advantage plan in 2020 (99 percent).

In addition to a larger uptake, Medicare Advantage plans have seen greater cost savings in the past year. With monthly premiums falling $3.87 and Part D premiums falling $4.70 since 2017, this will be the third year of decreases.

As a result, Medicare Advantage beneficiaries saved $1,598 over traditional Medicare beneficiaries in out-of-pocket healthcare spending and also saved significantly on prescription drugs. For inpatient stays, beneficiaries in Medicare Advantage payed one-seventh of what traditional Medicare beneficiaries paid.

Medicare Advantage plans also offer more diverse benefits, including the 80 percent of plans that offer vision, dental, or hearing benefits. All of these are benefits that traditional Medicare cannot offer. Over half of Medicare Advantage plans offer all four.

Vision benefits, which in general have produced high member satisfaction in 2020, are the most common benefit for Medicare Advantage plans to offer. Ninety-four percent of plans boast a vision plan.

Additionally, Medicare Advantage plans can offer non-medical supplemental benefits. Over 600 plans are offering such benefits, including telehealth which is available to over 14 million Medicare Advantage beneficiaries.

As an example, Humana’s 2020 Bold Goal showed the impact that these supplemental options can have. Humana’s Medicare Advantage members across the Bold Goal program reported more Healthy Days, as defined by the CDC. This is particularly significant for members with chronic conditions, who also saw more Healthy Days in 2019 than in 2018.

Andrew Renda, associate vice president of population health at Humana, told HealthPayerIntelligence that Humana’s success with chronic conditions was largely dependent on a population health strategy that sought to meet chronic conditions and social needs at the same time.

Despite these new benefit options, healthcare spending in Medicare Advantage has not swamped its fee-for-service counterpart.

“Medicare now spends roughly the same per beneficiary, on average, for Medicare Advantage as it does for Traditional FFS Medicare, achieving payment parity,” the report stated.

In fact, a separate UnitedHealth Group study showed Medicare Advantage spending to be 40 percent less than traditional Medicare.

A conglomeration of studies delineated the differences between Medicare Advantage beneficiaries spending and behaviors as opposed to traditional Medicare beneficiaries. For example, Medicare Advantage beneficiaries were less likely to be hospitalized and less likely to be readmitted in 30 days.

Some studies even identified ways in which Medicare Advantage may have diminished costs and improved outcomes for traditional Medicare beneficiaries.

Medicare Advantage beneficiaries tended to experience better member outcomes including complex chronically ill populations, which saw significantly fewer hospital stays and emergency room visits. Unnecessary and avoidable hospitalizations also were both less common among Medicare Advantage plans.

Not only were treatments, such as hospital stays, showing better results but also preventive care was more frequent among Medicare Advantage seniors, who had a 25 percent higher rate of annual preventive care access than traditional Medicare seniors.

These positive outcomes lead to high-quality plans overall, the report argued. This year, over eight in ten beneficiaries were expected to be in a four star Medicare Advantage prescription drug plan. That is more than fifty percent higher than the amount of individuals in four star plans a decade ago.

“Better Medicare Alliance calls on policymakers to maintain a stable growth environment for Medicare Advantage, ensuring that innovations in Medicare Advantage can flourish and that the continuity of the health coverage that millions of Americans depend on today is protected,” the report concluded.