Medicare Advantage: Not Advantageous
Written by Editor   
Tuesday, December 15, 2015 12:00 AM

The Medicare Advantage program hasn't quite worked out as promised under the Affordable Care Act (ACA), according to healthcare policy experts.  While designed to target the shortcomings of traditional fee-for-service Medicare, the idea that Medicare Advantage (MA) could reduce costs through better care coordination hasn't played out as intended, said Mark Miller, PhD, executive director of the Medicare Payment Advisory Commission (MedPAC).

Care coordination and quality improved in some communities, and certain MA plans even offered benefits at lower costs than fee-for-service Medicare, "but in aggregate, that never happened." Instead of saving money, the government was paying, at the highest point, 14% more than fee-for-service Medicare, he said.

"Managed care has cost Medicare throughout its history," Miller added.

Miller said MedPAC hopes to see the risk adjustment system rebalanced, so plans that include more beneficiaries with multiple chronic condition aren't penalized.  MedPAC research found that the risk adjustment system in MA underpaid for plans with lots of multiple chronic conditions, and overpaid if beneficiaries were relatively healthy, he explained.