A higher-cost Medicare Advantage plan is not associated with better health care for seniors

Enrolling in a more expensive Medicare Advantage plan may not always provide seniors with better health care, according to a new RAND Corporation study.

Examining 15 different quality measures among large, representative samples of people enrolled in Medicare Advantage plans in 2016 and 2017, researchers found that plans that charged a higher monthly premium provided only slightly better care, on average, than the plans without a monthly premium.

Quality varied widely within each premium cost tier examined, with high-quality care observed among a number of plans at each cost tier. More than 700 Medicare Advantage plans were part of the analysis.

The findings are published in the latest issue of JAMA Health Forum.

Paying higher premiums is not necessary to get high-quality care from a Medicare Advantage plan. Seniors should look at metrics other than just premium costs when looking for a Medicare Advantage plan that offers high-quality care, including direct measures of quality such as star ratings.”

Amelia M. Haviland, lead author of the study, professor of statistics and public policy at Carnegie Mellon University and assistant statistician at RAND

Health care costs are a concern for consumers and policy makers alike. People enrolled in Medicare Advantage plans report that price measures such as premium costs and co-payments are their main consideration when choosing a plan.

To examine the relationship between premium price and quality, RAND researchers analyzed information about care provided to people enrolled in Medicare Advantage plans. About 40% of enrollees were in plans with no monthly premium, while 6% were in plans with a monthly premium of more than $120.

Medicare Advantage plans provide coverage for hospital and doctor services like traditional Medicare fee-for-service, but they usually also offer additional services such as coverage for dental care and eyeglasses. In exchange for additional services and lower co-pays, members are limited to in-network providers. More than a third of Medicare enrollees choose Medicare Advantage plans.

Information used to measure quality of care by Medicare Advantage plans includes clinical quality measures based on administrative information such as medical records covering more than 2 million enrollees. These quality measures include items such as whether patients received recommended cancer screenings, whether high blood pressure was controlled, and whether diabetes was adequately treated.

The analysis also examined surveys of more than 168,000 randomly selected plan participants who were asked about their experiences with health care, prescription drug coverage and their plan. These measures include being able to get care, being able to get care quickly, and getting needed medication.

In most metrics, people enrolled in the two higher-premium plan tiers reported a similar or slightly better experience on average than enrollees in the lower-premium categories. For example, people enrolled in the highest premium levels are more likely to get annual flu shots.

However, by one measure, lower-cost plans offer better care. People enrolled in lower-tier plans received better osteoporosis care on average than their peers enrolled in higher-premium plans.

“Given that many high-quality and low-quality plans were found in each of the premium tiers we examined, premium price is a poor proxy for assessing the quality of a Medicare Advantage plan,” Haviland said. “Making plan quality information more accessible and meaningful to consumers is key to reducing consumer costs while improving quality.”

Support for the study was provided by the federal Centers for Medicare and Medicaid Services. Other study authors are Sai Ma of Humana and David J. Klein, Nathan Orr and Marc N. Elliott, all of RAND.


Journal reference:

Haviland, AM, and others. (2022) Association of Medicare Advantage premiums with measures of quality and patient experience. JAMA Health Forum. doi.org/10.1001/jamahealthforum.2022.2826.

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