Comparing the Characteristics and Experiences of Medicare Beneficiaries
Analyzing Data To Prepare for Growing Number of High-Need Medicare Beneficiaries
Starting in 2020, the United States will experience extraordinary growth in the 75+ population. As the number of older adults on Medicare rapidly increases, it is critical to understand the characteristics and experiences of Medicare beneficiaries—in both traditional Medicare and in private Medicare Advantage health plans.
We partnered with the Better Medicare Alliance to examine how Medicare coverage arrangements affect beneficiaries’ access to care, utilization of benefits, and out-of-pocket costs. We found that Medicare Advantage plays an important role in protecting vulnerable Medicare beneficiaries from healthcare costs.
Low-income Medicare beneficiaries are more likely to choose Medicare Advantage, and fewer of them report experiencing cost burden associated with out-of-pocket costs compared to low-income Medicare beneficiaries in traditional fee-for-service (FFS) Medicare.
Chronically ill beneficiaries are choosing Medicare Advantage at rates that mirror traditional FFS; and Medicare Advantage enrollees, overall, experience clinical and functional care needs at similar rates to those in the FFS population.
Medicare Advantage plans attract enrollees by reducing out-of-pocket costs and premiums required in the traditional Medicare FFS program (e.g., $1,350 hospital deductible). In some cases, Medicare Advantage plans also offer supplemental benefits that are not covered by Medicare FFS (e.g., dental, vision, podiatry). Our analysis suggests that Medicare Advantage plans may be meeting the needs of Medicare beneficiaries who cannot afford to fill coverage gaps by purchasing Medigap insurance or do not have access to employer-sponsored retiree healthcare coverage or Medicaid.
It also highlights that there are many Medicare Advantage enrollees who may benefit from the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (CCA), which became law as a part of the Bipartisan Budget Act of 2018. This law gives plans new flexibility to offer special supplemental benefits for the chronically ill. These benefits include non-medical services, such as in-home care, that improve or help maintain the health or overall function of chronically ill enrollees.
This analysis underscores the importance of ensuring equal access across the country to the cost protections and supplemental benefits available through Medicare Advantage. While a third of all Medicare beneficiaries enroll in Medicare Advantage, this rate varies significantly by state and county—producing uneven healthcare coverage options for older adults.
As Medicare Advantage enrollment grows, policymakers will need to carefully consider how future Medicare Advantage program changes, such as rate methodologies and quality measures, will equalize access to low cost, high quality plans and foster the kind of service delivery innovation that the growing numbers of very old Americans will need.