The American health care system is in a state of flux. From the skyrocketing cost of specialty pharmaceuticals to a recent surge in hospital consolidations, health care – as we know it – is undergoing a massive makeover, and no one knows if it will be prettier in the end. There is, however, one shining star in the bunch – the Medicare Advantage (MA) program, which is typically purchased by those 65 and older.
Unlike traditional Medicare, MA requires health plans and doctors to work collaboratively to take care of their members and incentivizes plans that manage and coordinate high-quality care at a lower cost. In fact, MA plans throughout the country are achieving substantial improvements in quality through value-added services like case management, medication therapy management, nutrition and wellness programs, and even no-cost gym memberships.
When Congress passed the Medicare Modernization Act (MMA) of 2004 and established Medicare Advantage, the program placed the onus of care management on the nation’s health plans. The idea was simple: Private plans will be incentivized to manage the care of the Medicare population better than the federal government. This concept has proven to be quite successful, as nearly one-third of those eligible for traditional Medicare instead opt for Medicare Advantage.
A series of recent studies demonstrates the ability of Medicare Advantage plans to improve care. In 2010, researchers affiliated with the Brookings Institution and Harvard University Economics Department found that MA plans outperformed the fee-for-service (FFS) program in nine out of 11 clinical quality measures. In February 2012, the American Journal of Managed Care published a study showing the hospital readmission rate for MA enrollees was about 13 to 20 percent lower than FFS beneficiaries.
Despite the insurmountable evidence in favor of Medicare Advantage, federal policy oftentimes works against the program. The Affordable Care Act imposed a series of taxes and restrictive reimbursement practices that fail to protect the program from rising health care costs. As a result, more and more plans have been forced to increase premiums and slash benefits, disproportionately impacting those who can least afford it – the more than 40 percent of Medicare Advantage enrollees who earn less than $20,000 per year.
With so many uncertainties in the health care industry, it’s time for decision-makers to wake up to the reality that Medicare Advantage is working and is sought after by a large percentage of the eligible population. CDPHP®, like many other health plans, works diligently to provide exceptional service and control costs for the 41,000 seniors currently enrolled in our Medicare products. Our plans are routinely rated among the best in the nation*. We will continue to work with policymakers on both sides of the aisle to strengthen this critically important program.
*NCQA’s Medicare Health Insurance Plan Ratings 2015-16