Individuals who jump ship from traditional Medicare to Medicare Advantage (MA) typically spend less on health care in the year prior to their switch, a new issues brief from the Kaiser Family Foundation suggests.
This may mean those enrolled in MA plans are healthier than their Medicare peers — and less in need of the in-home services and supports the Medicare Advantage program now covers.
San Francisco-based Kaiser Family Foundation is a nonprofit that focuses on national health issues, as well as the U.S. role in global health policy.
Using claims data from a 5% sample of Medicare beneficiaries spanning from 2013 to 2016, the issues brief examines whether people enrolled in Medicare Advantage plans have lower health care spending, on average, before they enroll than the people who stay in traditional Medicare.
Generally, people who switched to an MA plan in 2016, on average, spent $1,253 less than their traditional Medicare counterparts in 2015, even in instances where traditional Medicare beneficiaries had specific health conditions, such as diabetes, asthma, and breast or prostate cancer.
For example, traditional Medicare beneficiaries with diabetes in 2015 who enrolled in MA plans in 2016 had health care spending that was, on average, $1,072 lower than similar beneficiaries who stayed in Medicare.
“The results suggest that favorable self-selection into Medicare Advantage plans is occurring, even among traditional Medicare beneficiaries with similar health conditions,” Kaiser researchers said in the brief.
In April 2018, the Centers for Medicare & Medicaid Services (CMS) announced that it would include non-medical in-home care as a supplemental benefit for 2019 MA plans. This marked the first time CMS allowed non-medical in-home care services a supplemental benefit for MA.
At the start of 2019, only 3% of MA plans opted to offer in-home support services, according to AARP, in part due to questions surrounding what services plans were actually allowed to offer when the news first broke.
CMS provided additional clarity this April, allowing MA plans to cover any in-home care services and supports that realistically improve the health of individuals with chronic conditions.
“Health plans were asking CMS for clarification,” CareLinx President and CEO Sherwin Sheik told Home Health Care News in April. “Are we ok trying to do this? Can we do that?’ What CMS is basically saying now is, ‘We know you’re experimenting. We know you’re learning. We want you to invest here and see what happens.’”
While the statistics from Kaiser Family Foundation call into question just how sick and in need of home care services people in MA plans actually are, the issues brief also casts doubt on MA’s ability to lower health care spending more broadly.