The COVID-19 pandemic may soon come to its long-awaited end, but health care will remain top of mind for years to come.
As the public health emergency persists, Medicare Advantage, the managed care option chosen by over 40 percent of beneficiaries, has demonstrated its readiness in times of crisis. Health plans and providers acted quickly to transition to telehealth, waive consumer costs, and reach out to vulnerable beneficiaries.
Today, 94 percent of Medicare Advantage plans provide expanded telehealth services and over half provide some form of a meal delivery benefit. Ninety eight percent of seniors are satisfied with their Medicare Advantage plan’s handling of the pandemic.
The voluntary enrollment in Medicare Advantage has skyrocketed over the last six years, driven by low and modest income and minority beneficiaries who appreciate the simplicity, affordability, extra benefits, and care coordination they receive from a defined network of providers.
Most policymakers recognize the value of Medicare Advantage to their constituents as well. Seventy five percent of Congress showed bipartisan support for Medicare Advantage in early 2020. Recently, the new secretary of Health and Human Services, Xavier BecerraXavier BecerraOvernight Health Care — FDA panel backs boosters for some, but not all Biden administration announces federal support for patients, abortion providers in Texas Biden administration releases B in COVID-19 relief for providers MORE, spoke of Medicare Advantage’s value in his confirmation hearing.
Yet, there are still outlier critics. Some say Medicare Advantage is “too good,” making it hard for Traditional Medicare to compete. Others argue it is unfair that Medicare Advantage can offer extra benefits and lower cost to consumers. Add to this the looming financial challenge of the Medicare Trust Fund and there is more pressure to find savings in Medicare.
These comments and the financial pressure of the Trust Fund suggest that Medicare Advantage could be targeted with actions that could do harm, even as it leads in lowering out-of-pocket costs for consumers and driving greater value for our public dollar, which are goals of the new administration.
Ill-informed changes to Medicare Advantage would be devastating to seniors, most of whom live on fixed incomes and are already heavily burdened by the challenges of the pandemic. It is time to clear the air on how Medicare Advantage dollars are used and how adequate, stable funding is essential to its achievements.
In Medicare Advantage, health plans receive a per-member, per-month payment based on the cost of the average beneficiary in Traditional Medicare. It is then adjusted for every beneficiary based on their health status and risk factors. Medicare Advantage profit margins are limited by law and carefully regulated, with review and approval by the federal government.
When Medicare Advantage was first enacted, the goal was to be able to offer more value at the essentially the same cost as Traditional Medicare — and Medicare Advantage has delivered.
Payment to Medicare Advantage has met that goal of parity as a result of action taken in 2010 to reduce payments. Today, Medicare Advantage’s payment relative to Traditional Medicare spending is lower than it was in 13 of the last 18 years.
Health plans in Medicare Advantage are also required to identify all diagnoses each year for each enrollee, since payments are tied to risk of beneficiaries. Health plans tend to identify more diagnoses as compared to Traditional Medicare since Traditional Medicare is paid by the services provided for a particular episode of care. There is no annual reporting of all diagnoses in Traditional Medicare, so a difference between the two programs is to be expected.
Identification of health risks and savings achieved in Medicare Advantage allow health plans to offer extra benefits and tailor care to the enrollee. Today, supplemental benefits like vision, hearing, dental, and wellness coverage are nearly universal in Medicare Advantage. Benefits ranging from transportation to medical appointments, in-home support services, and food and produce delivery are on the rise as well.
All the while, Medicare Advantage beneficiaries report an average annual savings of roughly $1,600 over their Traditional Medicare counterparts, as well as lower rates of avoidable hospitalizations and higher rates of preventive care and screenings.
The financial health of the Medicare Trust Fund cannot be ignored, but neither can the success of Medicare Advantage in delivering more benefits, lower consumer costs, and better health outcomes to a proportionally lower-income, more diverse, and more socially at-risk beneficiary audience.
Disruptions to Medicare Advantage that shortchange seniors and disabled beneficiaries would be harmful and particularly unjust as COVID-19 remains in our lives.
Instead, Americans deserve a fair discussion about what we want Medicare to be and do, and how to pay for it. Policymakers have a proud tradition of investing in health needs. The health care of the increasingly complex and diverse population that chooses Medicare Advantage must be such a priority.
Medicare Advantage has proven its commitment to beneficiaries. Policymakers can do the same by protecting and strengthening this coverage lifeline.
Allyson Y. Schwartz is the president and CEO of the Better Medicare Alliance and a former Member of the U.S. House of Representatives from Pennsylvania, serving from 2005 to 2015.