The Problematic Push to Slow Medicare Advantage’s Positive Health Impact
In the complex deliberations on Capitol Hill to assemble a social spending package that can pass both houses, one of the prominent proposals being discussed is the expansion of Medicare benefits to include dental, vision, and hearing coverage. The cost would be significant, over $300 billion over 10 years based on an earlier estimate. There are valid arguments to be made for closing gaps in current Medicare coverage. Where millions of Medicare beneficiaries need to be concerned, though, is in one of the ideas being tossed around to pay for this coverage expansion, placing the financial burden on Medicare Advantage (MA) plans and those who rely on them for their healthcare.
Some have suggested financing these additional benefits by excluding them from the benchmark that Medicare uses to determine payment rates for Medicare Advantage plans. The USC-Brookings Schaeffer Initiative for Public Policy, in fact, published an essay advocating this approach.
Let’s break down exactly what this means and clarify the ramifications of such a step. Under this approach, Congress would be creating new defined benefits for Medicare beneficiaries, but it would not be funding those benefits for MA plans. MA plans receive rebates from the government by submitting bids for the coming plan year that are lower than the benchmark. Those rebates are generally funneled back into additional benefits for enrollees and initiatives to address social determinants of health (more on that in a moment). If the range of defined Medicare benefits expands but that is not reflected in the benchmark, that will mean a significant shrinkage of rebates to MA plans.
Put succinctly, for the first time ever, Medicare would be segmenting its beneficiary population into different groups with different levels of benefits. Medicare Advantage plans and enrollees will be paying for expanded benefits for those in conventional fee-for-service Medicare, and there will be consequences for doing that.
Today, more than four of every 10 Medicare beneficiaries – over 26 million in all – are enrolled in an MA plan, with that number growing annually. And as more seniors enroll in these plans, the collective health of the over-65 population improves. Research has shown that MA plans surpass conventional fee-for-service Medicare on multiple clinical quality measures and patient experience standards.
Just as importantly, as health experts come to the increasing realization that non-clinical social determinants can have an even greater impact on health than clinical care, more Medicare Advantage plans are providing coverage for transportation, housing, nutrition and social support services. This can make a profound difference in the lives of at-risk seniors. If, however, lawmakers choose to take dollars out of Medicare Advantage in order to fund proposed dental, hearing and vision benefits, something has to give.
No one is suggesting that Congress shouldn’t address existing gaps in Medicare coverage, but there needs to be greater foresight in determining how to pay for it. It makes little sense to undermine a program that is providing quality healthcare to our most vulnerable age group and is addressing the social determinants that affect lives and health.