Growing Popularity of Medicare Advantage Reflects Its Commitment to Value and High-Quality Coverage Choices

More than 29 million seniors and people with disabilities choose Medicare Advantage (MA) for their health care coverage.

That’s up from about 13 million a decade ago.

The growing popularity of the program reflects MA plans’ commitment to – and ability to deliver – better services, better access to care, and better value.

Research continues to show that MA delivers lower costs, more choices, and better outcomes for Americans. A recent study found that, looking at comparable coverage and patient populations, original Medicare is significantly more expensive than government estimates suggest—demonstrating that MA is meaningfully less expensive than original Medicare, and is saving taxpayers billions each year.

That is why Americans strongly agree that MA should be protected. And why MA enrollees have extremely high satisfaction rates with their coverage.

Whole-Person Care

MA was created by Congress to offer seniors an alternative to original Medicare – with an emphasis on treating and managing the health of the whole patient.

Whole-patient care improves patient satisfaction and patient outcomes, in addition to saving taxpayers money. Effective care coordination requires understanding the comprehensive health care profile of each individual patient and person.

Critics of MA claim that MA plans aggressively code – a criticism described in an October 9, 2022, story from The New York Times. But here are the facts: Accurate and complete coding helps MA plans and their providers actively integrate patient-centric care, better manage chronic conditions, and improve wellness and quality.

MA plans coordinate care to help prevent existing health conditions from worsening and help people get healthier faster and stay healthier longer. As a fee-for-service program, original Medicare simply does not engage in the long-term health of the patient as well as MA does. By contrast, for the MA model to work as intended, MA plans must understand their members by developing accurate and complete health risk profiles.

This is what sets MA apart from original Medicare – and it is by design. As a fee-for-service program, original Medicare pays for care based on procedure codes in claims submitted. Congress designed MA as a capitated program – paying a fixed amount per enrollee per month – to incentivize MA plans to deliver better services at a lower cost for seniors and taxpayers, particularly for enrollees with chronic conditions. Congress also designed additional reimbursement to incent MA plans to serve – and create innovative new benefit programs to care for – patients with chronic and serious illnesses.

MA plans responded with new benefit programs accordingly, which have been a key part of how they deliver better care and better outcomes at a lower cost.

HHS Finds MA Outperforms Original Medicare in Payment Accuracy

MA plans rely on physicians’ medical records to obtain a view into individual and population health. Given this reality, CMS has narrow coding standards for demonstrating a person has a health condition. So-called “errors” may only be the result of incomplete documentation rather than erroneous diagnoses or conditions.

At the same time, coding is not an exact science; reasonable, trained professionals can interpret the same medical record in different ways.

MA continues to outperform original Medicare when it comes to net improper payments. HHS annually calculates improper payment rates in the original Medicare and MA programs based on a sample of claims in each program. The results of these analyses typically include both underpayments (how much more should have been paid) and overpayments. In 2021, the net improper payment rate – taking into account overpayments - in MA was 3.18%. This is only about half the net improper payment rate of 6.04% in original Medicare.

MA plans continue to work to improve payment rates, and they invest considerable resources to ensure the accuracy of every claim submitted to CMS.

A Strong Example of Public-Private Partnership

Study after study has found both higher levels of patient satisfaction as well as consumer value.

And surveys consistently report that America’s seniors like and want policymakers to protect Medicare Advantage. Of course, the best evidence for that are the tens of millions and growing share of seniors who are choosing MA plans over original Medicare every year.

MA has strong bipartisan support because it is a prime example of the government and free market working together to deliver lower costs, more choices, and better outcomes for the American people. Large bodies of research – and the American people – provide strong evidence that the program should be protected – and should not be undermined by unproven claims.