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 Medicare beneficiaries in 2024, up from 29% in 2013. MA’s market share is expected to hit 62% by 2033, according to the Congressional Budget Office. 

A big factor driving the rapid expansion is often the promise 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 ends on Dec. 7. 2024.

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 on pre-approvals called prior authorizations as well as care after hospitalization and cancer treatment, the nation’s fastest growing area of medical spending. 

LDI Fellows have developed a special emphasis on people 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

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

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. 

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

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 high-rated MA plans by race and ethnicity may be explained by limited access and not by individual characteristics or enrollment decisions.

Dual Eligibles in Medicare Advantage 

Eric Roberts, PhD: Examination of Differences in Nonmedical Supplemental Benefit Coverage for Dual-Eligible Enrollees in Medicare Advantage Plans in 2021

MA plans serving only dual-eligible beneficiaries offered more nonmedical supplemental benefits than general MA plans in 2021. However, this coverage was low, particularly among Dual Eligible Special Needs Plans (D-SNPs). Although Fully Integrated Dual Eligible Special Needs Plans (FIDE-SNPs) were more likely to cover these benefits, they accounted for only 7.8% of total enrollment. The most common benefits were for food and produce, meal delivery, and nonmedical transportation. Home care services and other social services were available to fewer dual-eligible beneficiaries across all plan types. These findings suggest that MA plans serving these beneficiaries have an opportunity to expand coverage of supplemental non-health benefits. 

Commentary by Eric Roberts, PhD: Medicare Advantage Supplemental Benefits for Dual-Eligible Beneficiaries and Recommendations for Reform

Because D-SNPs are required to have contracts with state Medicaid programs, states can leverage these contracts to require D-SNPs to take a more coordinated approach to designing supplemental benefits. This might involve “stacking” benefits so that a D-SNP pays for basic benefits and the affiliated Medicaid plan wraps around those benefits. For example, a D-SNP might pay for medically tailored meals while a Medicaid plan could cover nutritional supports more broadly. Such changes may be most feasible to implement in Applicable Integrated Plans, which are D-SNPs that, either directly or through a companion Medicaid plan, manage Medicare and Medicaid benefits and spending for the same beneficiaries.

Eric Roberts, PhD: Differences in Healthcare Utilization Between Enrollees of Fully Integrated Dual Eligible Special Needs Plans Versus Non-Fully Integrated Plans

One rapidly expanding model is the Fully Integrated Dual Eligible (FIDE) plan, a sub-type of the D-SNP in which a parent insurer manages Medicare and Medicaid spending for dually eligible individuals. Home and community-based service (HCBS) users with FIDE plans had fewer hospitalizations and were more likely to be discharged to their home after hospitalization, compared to HCBS users with non-FIDE plans. These findings suggest that FIDE plans may improve care coordination for specific subsets of dually eligible individuals.

Eric Roberts, PhD: Medicare and Medicaid Dual-Eligible Special Needs Plan Enrollment and Beneficiary-Reported Experiences with Care

We analyzed MA Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys to compare dual-eligible individuals’ experiences with care across three categories of plans: coordination-only 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 domains like 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.

Eric Roberts, PhD: Rapid Enrollment Growth In ‘Look-Alike’ Dual-Eligible Special Needs Plans: A Threat to Integrated Care (2023)

Policymakers are increasingly investing in efforts to better integrate Medicare and Medicaid services for people who are eligible for both programs, including expanding D-SNPs. In recent years, however, a potential threat to integration has emerged in the form of D-SNP “look-alike” plans, which are conventional MA plans that are marketed toward and primarily enroll dual eligibles but are not subject to federal regulations requiring integrated Medicaid services. To date, limited evidence exists documenting national enrollment trends in look-alike plans or the characteristics of dual eligibles in these plans.

We found that look-alike plans experienced rapid enrollment growth among dual eligibles during the period between 2013-20, increasing from 20,900 dual eligibles across four states to 220,860 dual eligibles across 17 states, for an elevenfold increase. Nearly one-third of dual eligibles in look-alike plans were previously in integrated care programs. Compared with D-SNPs, look-alike plans were more likely to enroll dual eligibles who were older, Hispanic, and from disadvantaged communities. Our findings suggest that look-alike plans could compromise national efforts to integrate care delivery for dual eligibles, including vulnerable subgroups who may benefit the most from integrated coverage.

Eric Roberts, PhD: Differences in Care Between Special Needs Plans and Other Medicare Coverage for Dual Eligibles

Compared with those in traditional Medicare, dual eligibles generally reported greater access to care, preventive service use, and satisfaction with care in D-SNPs. However, we found fewer differences in these outcomes among dual eligibles in D-SNPs versus other MA plans. Compared with non-Hispanic white dual eligibles, dual eligibles of color (for example, those identifying as Black or Hispanic) were less likely to report receiving better care in D-SNPs versus other Medicare coverage. These findings suggest that D-SNPs altogether have not provided consistently superior or more equitable care.

Medicare Advantage Spending

Ezekiel Emanuel, MD, PhD, and Amol Navathe, MD, PhD: Evaluation of Spending Differences Between Beneficiaries in Medicare Advantage and the Medicare Shared Savings Program

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,

Aaron Schwartz MD, PhD; Seyoun Kim, MHS; Amol Navathe, MD, PhD; and Atul Gupta, PhD: Growth of Medicare Advantage After Plan Payment Reductions (2023)

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. For more LDI coverage of this study, see here.

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

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.

Amol Navathe, MD, PhD: Association Between a Bundled Payment Program for Lower Extremity Joint Replacement and Patient Outcomes Among Medicare Advantage Beneficiaries (2023)

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 

Robert Burke, MD, MS, and Rachel M. Werner, MD, PhD:  Trends in Post-Acute Care use in Medicare Advantage Versus Traditional Medicare: A Retrospective Cohort Analysis

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 Medicare Advantage (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 similar measured quality to TM, but have a similar number of days outside the hospital or SNF in the first 100 days after hospital discharge.

Norma Coe, PhD: Association of Medicare Advantage Star Ratings with Patterns of End-of-Life Care

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 individuals to hospice under the current “hospice carve-out” policy, and likely lack explicit hospice networks. 

Rachel M. Werner, MD, PhD, and Norma Coe, PhD: The Value of an Additional Day of Post-Acute Care in a Skilled Nursing Facility

We found that one additional day in a SNF lowers short-term readmission rates, but this effect is small and heterogeneous across patient types. The most clinically complex patients (those with the longest predicted SNF stays) benefit the most from an additional SNF day, as do patients whose stays are shorter because of non-health-related factors. The cost savings from reduced readmission rates are small and do not offset the additional SNF costs.

Medicare Advantage and Cancer 

Amol Navathe, MD, PhD, and Aaron Schwartz, MD, PhD: Association of Participation in Medicare’s Oncology Care Model with Spending, Utilization, and Quality Outcomes Among Commercially Insured and Medicare Advantage Members

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.

Atul Gupta, PhD: Association of Utilization Management Policy with Uptake of Hypofractionated Radiotherapy Among Patients with Early-Stage Breast Cancer

Breast cancer accounts for the largest portion of cancer-related spending in the U.S. Although hypofractionated radiotherapy after breast-conserving surgery is a cost-effective and convenient treatment strategy for patients with early-stage breast cancer, less than 40% of eligible women received hypofractionated radiotherapy in 2013. A commercial payer’s utilization management policy was associated with direct and spillover increases in the uptake in the use of hypofractionated radiotherapy among patients with early-stage breast cancer between 2012 and 2018.

Aaron Schwartz, MD, PhD: Trends in Low-Value Cancer Care During the COVID-19 Pandemic

Low-value cancer care—such as aggressive end-of-life treatments—remained prevalent throughout the pandemic. Policymakers should consider changes to payment and incentive design to turn the tide against low-value cancer care.

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All studies were published in 2024 unless otherwise noted. 

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