Unbiased Analysis of Today's Healthcare Issues

Medicare Advantage Plans: Thumbs Up or Down?

Written By: Jason Shafrin - Aug• 20•14

Austin Frakt says although Medicare Advantage plans used to be considered high cost, low-quality options, in recent years, these Medicare Advantage plans have vastly increased quality of care and have become less focused on cream-skimming healthier patients.

 

Medicare Advantage plans — private plans that serve as alternatives to the traditional, public program for those that qualify for it — underperform traditional Medicare in one respect: They cost 6 percent more.

But they outperform traditional Medicare in another way: They offer higher quality. That’s according to research summarized recently by the Harvard health economists Joseph Newhouse and Thomas McGuire, and it raises a difficult question: Is the extra quality worth the extra cost?

It used to be easier to assess the value of Medicare Advantage. In the early 2000s,Medicare Advantage plans also cost taxpayers more than traditional Medicare. It also seemed that they provided poorer quality, making the case against Medicare Advantage easy. It was a bad deal…

…in contrast to studies in the 1990s, more recent work finds that Medicare Advantage is superior to traditional Medicare on a variety of quality measures. For example, according to a paper in Health Affairs by John Ayanian and colleagues, women enrolled in a Medicare Advantage H.M.O. are more likely to receive mammography screenings; those with diabetes are more likely to receive blood sugar testing and retinal exams; and those with diabetes or cardiovascular disease are more likely to receive cholesterol testing.

This may be why almost 1 in 3 Medicare beneficiaries choose a Medicare Advantage plan over traditional Medicare fee-for-service.

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