Improving Medicare Advantage payment policy while focusing on implications for consumers
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Spotlight (AARP Public Policy Institute)
- Author(s):
- Noel-Miller, Claire, author Sung, Jane, author
- Contributor(s):
- Public Policy Institute (AARP (Organization)), issuing body.
- Publication:
- Washington, DC : AARP Public Policy Institute, February 2023
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Consumer Advocacy Health Expenditures -- trends Health Policy Insurance, Health, Reimbursement -- economics Medicare Part C -- economics Medicare Part C -- trends United States
- Genre(s):
- Technical Report
- Abstract:
- Since the 1980s, the Medicare program has included a private insurance option, with the goal of reducing Medicare costs while improving health care quality and promoting innovation. This option has evolved to what is known today as Medicare Advantage (MA) or Medicare Part C, an alternative to traditional Medicare (also called Original Medicare). Under MA, the federal government makes payments to health insurance companies to provide Medicare benefits for people who elect to receive their coverage through private plans. In recent years,--based on its growth in enrollment and spending--MA has played an increasingly prominent role in the Medicare program. Although MA remained a relatively small share of Medicare enrollment for most of its history, enrollment in Medicare’s private plans has accelerated rapidly over the past decade. Now MA plans make up almost half of total Medicare enrollment and are predicted to soon cover more people than traditional Medicare does. In addition, per-person annual spending for MA has grown faster than spending for people in traditional Medicare. Today, Medicare spends more for each MA enrollee than it does for similar individuals with traditional Medicare. This results in the Medicare program spending billions more annually than if MA enrollees were instead covered by traditional Medicare. The continued growth in MA enrollment and MA spending has important implications for Medicare’s overall financial outlook and for the Medicare Hospital Insurance (HI) Trust Fund’s solvency. In turn, such growth could also have important consequences for the millions of people who rely on Medicare and their families. This Spotlight examines recent trends in MA growth and spending. Drawing from current evidence, we identify the key features of the complex MA payment system that contribute to higher MA plan payments as compared with traditional Medicare. We highlight opportunities for policy changes to address current issues that also have the potential to improve the overall Medicare program. The report calls attention to the critical importance of keeping consumers front and center in considering any changes to the current MA payment system.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (16 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918610385006676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918610385006676