Over the last two years, LDI Fellows have published more than 20 studies on Medicare Advantage (MA), the fast-growing alternative to traditional Medicare, on issues ranging from racial disparities to the program’s high costs for taxpayers.

Interest from researchers has risen as the MA program has soared in popularity, covering  54% of eligible Medicare beneficiaries in 2024, up from 29% in 2013. MA’s market share is expected to reach 62% by 2033, according to the Congressional Budget Office.  

Driving the rapid expansion is often the offer of extra benefits that traditional Medicare does not cover, such as dental, vision, and more. Other enticements include zero-premium plans, out-of-pocket spending limits, and aggressive marketing from celebrity pitchmen like actor William Shatner and former Arkansas Gov. Mike Huckabee. The program’s open enrollment ended on Dec. 7.

LDI Fellows have delved into the program’s costs for taxpayers, which are substantially higher than those of traditional Medicare. They have also looked at the effects of MA plans’ common use of pre-approvals, or prior authorizations, on health care utilization and spending. In addition, LDI Fellows looked at national trends in hospitalization and post-acute care use in skilled nursing facilities and home health, as well as the spillover effects of a value-based payment model for traditional Medicare recipients on those in Medicare Advantage.

LDI Fellows have developed a focus on people who are dually eligible for Medicare and Medicaid and the Special Needs Plans (SNPs) that seek to better integrate their care. The number of people in those SNPs jumped by 21.5% from 2023 to 2024.

Here’s a rundown of recent work by LDI Fellows:

Equity

Racial and Ethnic Disparities in Access to and Enrollment in High-Quality Medicare Advantage Plans
Rachel M. Werner and Norma B. Coe

Racial and ethnic minority enrollees in MA plans tend to be in lower-quality plans, measured by a 5-star quality rating system. Differences in enrollment in highly rated MA plans by race and ethnicity may be explained by limited access and not by individual characteristics or enrollment decisions.

Racial and Ethnic Disparities in Satisfaction with Healthcare Access and Affordability in Medicare Advantage vs. Traditional Medicare
Eric T. Roberts

MA was associated with smaller Hispanic-white disparities in satisfaction with out-of-pocket costs among non-dual-eligible beneficiaries, and smaller Black-white disparities in satisfaction with specialist access among dual-eligible beneficiaries. For other outcomes, MA was not associated with smaller disparities, reflecting pervasive inequities in satisfaction with care regardless of the type of Medicare coverage.

Dual Eligibles in Medicare Advantage 

Dual-Eligible Nursing Home Residents: Enrollment Growth in Managed Care Plans That Coordinate Care, 2013–20
Eric T. Roberts and Rachel M. Werner

We examined enrollment in three plans that provide incentives for coordinating care of dual-eligible beneficiaries receiving long-term nursing home care across Medicare and Medicaid. Two of those plans, Medicare-Medicaid plans and Fully Integrated Dual Eligible Special Needs Plans (FIDE-SNPs), are integrated care plans that establish a global budget, including Medicare and Medicaid spending. The third, Institutional Special Needs Plans (I-SNP), puts insurers and nursing homes at risk for Medicare spending but not Medicaid spending. Among dual-eligible nursing home residents, enrollment in these plans increased from 6.5% of residents per month in 2013 to 16.9% in 2020.

Medicare and Medicaid Dual-Eligible Special Needs Plan Enrollment and Beneficiary-Reported Experiences with Care
Eric T. Roberts

We analyzed MA Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys to compare dual-eligible individuals’ experiences with care across three plan categories: coordination-only Dual Eligible Special Needs Plans (D-SNPs), FIDE-SNPs, and non-D-SNP MA plans. In this cross-sectional study, we found that FIDE-SNPs performed better than non-D-SNP MA plans in some domains but worse on other domains, including care coordination. Furthermore, FIDE-SNPs generally did not perform better than coordination-only D-SNP plans. The findings highlight some benefits in patient experience associated with enrollment in FIDE-SNPs and an opportunity to improve patient experience in these plans.

Medicare Advantage Spending

Evaluation of Spending Differences Between Beneficiaries in Medicare Advantage and the Medicare Shared Savings Program
Ezekiel J. Emanuel and Amol S. Navathe

The two primary efforts of Medicare to advance value-based care are MA and the fee-for-service-based Medicare Shared Savings Program (MSSP). In this study, utilization and spending were consistently higher for MSSP than MA beneficiaries within the same health system, even after adjusting for granular metrics of clinical risk. Nonclinical factors likely contribute to the large differences in MA versus MSSP spending.

Growth of Medicare Advantage After Plan Payment Reductions (2023)  
Aaron Schwartz, Seyoun Kim, Amol S. Navathe, and Atul Gupta

This cohort study found no evidence that the MA benchmark and ensuing payment cuts imposed by the Affordable Care Act (ACA) were associated with reduced MA enrollment, compromising access to MA. This evidence can inform ongoing policy debates regarding the growth of MA, concerns about excess payments to MA plans, and proposed Medicare reforms, including further reductions in MA payments. See additional coverage of this study here.

Comparison of Prior Authorization Across Insurers: Cross Sectional Evidence from Medicare Advantage
Aaron Schwartz

The team studied five MA managed care plans and found extensive and inconsistent use of prior authorization. They examined the impacts of these coverage rules on physician services by comparing them to traditional Medicare, which does not use prior authorization, and their findings were dramatic: At least one MA plan would have required prior authorization for nearly half of traditional Medicare spending—and for 93% of physicians’ drug spending, according to their calculations. See additional coverage of this study here.

Association Between a Bundled Payment Program for Lower Extremity Joint Replacement and Patient Outcomes Among Medicare Advantage Beneficiaries (2023)
Amol S. Navathe In this study of a lower extremity joint replacement (LEJR) bundled payment program offered by a national MA insurer, findings suggest that physician practice participation in the program was associated with a decrease in episode spending without changes in quality. Bundled payments offered by private insurers, including MA plans, are an alternate payment option to fee-for-service that may reduce spending for LEJR episodes while maintaining quality of care.

Medicare Advantage and Skilled Nursing Facilities, Home Hospice, End-of-Life Care 

Trends in Post-Acute Care Use in Medicare Advantage Versus Traditional Medicare: A Retrospective Cohort Analysis
Bob Burke and Rachel M. Werner  

We sought to describe national trends in hospitalization and post-acute care utilization rates in skilled nursing facilities (SNFs) and home health (HH) for both MA and Traditional Medicare (TM) beneficiaries, reaching up to the COVID-19 pandemic (2015-2019). MA beneficiaries have fewer days in post-acute care, receive care from fewer providers of similarly measured quality to TM, but have a similar number of days outside the hospital or SNF in the first 100 days after hospital discharge.

Association of Medicare Advantage Star Ratings with Patterns of End-of-Life Care
Norma B. Coe

MA quality ratings exhibit limited association with the quality of end-of-life care. Particularly, highly rated MA contracts were not associated with improved access to hospice. Once hospitalized, however, highly rated MA contracts provide less intensive end-of-life care. As the current quality rating system does not factor in measures for end-of-life care, this generates little incentive for MA contracts to improve the quality of care at the end of life. MA plans have powerful economic incentives to refer persons to hospice under the current “hospice carve-out” policy, and likely lack explicit hospice networks.

Medicare Advantage and Cancer 

Association of Participation in Medicare’s Oncology Care Model with Spending, Utilization, and Quality Outcomes Among Commercially Insured and Medicare Advantage Members

Amol S. Navathe and Aaron Schwartz

The Oncology Care Model (OCM), a value-based payment model for traditional Medicare beneficiaries with cancer, yielded total spending reductions that were outweighed by incentive payments, resulting in net losses to the Centers for Medicare & Medicaid Services. We studied whether the OCM yielded spillover effects in total episode spending, utilization, and quality among commercially insured and MA members, who were not targeted by the program.The OCM was associated with reductions in spending for nontargeted members—a spillover effect.

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All studies were published in 2024 unless otherwise noted. 

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