- Medicare Advantage beneficiaries are twice as likely to be non-white compared with traditional fee-for-service enrollees, and are also more likely to have lower incomes, according to a new white paper from Inovalon and Harvard Medical School.
- The analysis, which focused on characteristics of beneficiaries when they enroll at age 65, also found MA enrollees had average income almost $10,000 less than FFS beneficiaries.
- The research comes as federal regulators and watchdogs heighten scrutiny of MA amid rising spending. Advocates say the popular plans lower costs and improve outcomes for enrollees.
MA has grown steadily more popular over the past 15 years, with half of eligible beneficiaries now choosing the privately-administered plans.
Proponents argue the plans, which receive a set amount of money from the government to cover care for beneficiaries, offer better health outcomes at a lower cost through value-based care arrangements. A recent study by Avalere Health, commissioned by the MA lobbying group Better Medicare Alliance, found MA beneficiaries with certain chronic conditions have lower rates of acute care utilization and overall healthcare spending compared with FFS enrollees.
But as MA spending has increased, watchdogs have raised concerns about overpayments to the private insurers who run the plans, saying they risk the financial health of the Medicare program. Researchers from the USC Schaeffer Center for Health Policy and Economics said overpayments could reach more than $75 billion this year due to favorable selection of beneficiaries, quality payments and more aggressive coding.
Early this year, the CMS finalized a rule aiming to claw back some of the overpayments. The agency has also been cracking down on MA plans for routinely denying prior authorization requests and using deceptive or misleading marketing practices to get seniors to switch their coverage.
Researchers from Inovalon and Harvard say their white paper — the first in a series on the Medicare program — aims to compare beneficiaries as they transition from commercial coverage at age 65, eliminating confounding factors like which program they’re currently enrolled in, coding differences or care intensity after enrollment. Inovalon is a technology company that offers cloud-based software for healthcare data analytics.
“Socioeconomically vulnerable populations may place greater value on the financial advantages that MA plans offer, such as lower cost sharing and reduced Part B and Part D premiums,” they wrote. “These populations may appreciate the simplicity of MA enrollment.”
Though the white paper found people who chose MA plans were less sick — with about 10% lower Hierarchical Condition Category and Charlson Comorbidity Index scores immediately prior to enrollment — MA and FFS services had similar prevalence of the top chronic conditions.