The September issue of Health Affairs expands our understanding of the growing levels of enrollment in Medicare Advantage (MA), provides insights into health care prices and patient cost sharing, explores the role of hospice for people with dementia, and more.

Medicare

MA benchmarks, which are established on the basis of traditional Medicare spending, play a central role in determining how much MA plans are paid.

Adverse selection into traditional Medicare can artificially inflate MA benchmarks, a phenomenon distinct from upcoding.

Analyzing benchmark rates, Andrew Ryan and coauthors conclude that "favorable selection into MA led to underpayments for counties with lower MA penetration and overpayments to counties with higher MA penetration."

Meanwhile, MA enrollment has shifted to counties with higher MA penetration. The net result is overpayments to MA plans of nearly $10 billion per year between 2017 and 2020.

Rapid growth in MA enrollment is largely due to enrollees switching from traditional Medicare to MA, according to analysis by Lanlan Xu and colleagues.

Although overall Medicare enrollment increases account for some MA growth, examining enrollment data from the period 2006–22, the authors find that "the share of MA enrollment growth due to switching was 80 percent or more each year from 2020 to 2022 compared with 61–79 percent in the ten years before then."

In addition, enrollees who switch into MA from traditional Medicare are disproportionately healthy, whereas those who switch out of MA are disproportionately less healthy.

In a DataWatch, Jeffrey Marr and coauthors find that MA enrollees were almost 25 percent less likely than traditional Medicare enrollees to receive multiple home-based medical care visits in 2018.

In contrast, MA enrollees were thirty-one times as likely to have exactly one such visit, which could reflect efforts to identify unmet needs or to identify diagnoses that allow for larger risk-adjustment payments.

Jeah Jung and coauthors compare how many health care resources are used by enrollees in MA and traditional Medicare.

Examining treatment patterns for specific conditions, they find that resource use was lower in 2019 among MA enrollees for twenty-three of the thirty-three examined conditions, with use ranging from 2 percent to 12 percent lower among those conditions, primarily as a result of lower use of hospital inpatient care.

Resource use among MA enrollees was higher for imaging and testing services than it was for enrollees in traditional Medicare.

Affordability

Hospital stays that include use of the intensive care unit (ICU) cost significantly more than stays without an ICU.

Sneha Kannan and coauthors ask whether these additional costs translate to higher out-of-pocket spending by patients.

Analyzing commercial claims from the period 2008–19, they find that the difference was modest, averaging $155 for services that cost tens of thousands of dollars.

Patient cost sharing grew by about one-third during the study period, largely due to increasing deductibles.

Jack Chapel and coauthors explore the health and economic trends of middle-income near-retirees between 1994 and 2018.

Using a dynamic microsimulation, they examine factors including expected mortality, health expenditures, and quality-adjusted life-years, and they report "an increasingly bifurcated society for the middle-resourced future elderly population along nearly all dimensions examined."

Although life expectancy and resources increased for the upper-middle economic status group, they remained stagnant for the lower-middle group.

Aditi Sen and colleagues compare the prices negotiated by self-insured and fully insured employers for commonly used services.

Despite the strong incentive that self-insured employers have to contain costs, the authors conclude that "prices were found to be moderately higher in self-insured plans for most services."

Age-Friendly Health

Although the Medicare hospice benefit was constructed around the needs of patients with cancer, the majority of Medicare hospice enrollees now have dementia.

Melissa Aldridge and coauthors examine data from the period 2002–19 and find that "people with dementia living in the community who used hospice incurred significantly lower total health care costs when enrolled with hospice for each period up to three months before death compared with those who did not use hospice," primarily as a result of lower inpatient care costs.

Cost differences were not as large for people living in nursing homes.

Adam Dean and coauthors examine the relationship between unionization and nursing homes’ compliance with the Occupational Safety and Health Administration (OSHA) requirement that workplaces report the number of injuries and illnesses that occur at their establishments.

They estimate that two years after unionization, nursing homes were more than 30 percentage points more likely than nonunion nursing homes to report an illness or injury to OSHA.

Introducing: Research and Justice For All

Research and Justice For All is a new podcast from Health Affairs that provides perspectives on how to dismantle unjust systems and structures that have long impacted health outcomes in historically marginalized populations.

Hear how to challenge injustices in health care – rooted in racism, sexism, ableism, and other forms of exclusion – through research, evidence, community-building, and other potential and innovative solutions.

The first season, sponsored by CVS Health, is co-hosted by Dr. Sree Chaguturu, Chief Medical Officer (CVS Health) and Dr. Joneigh Khaldun, Chief Health Equity Officer (CVS Health).

The show features C-Suite level executives, such as Karen DeSalvo (Google), Rashad Burgess (Gilead Sciences), Thomas D. Sequist (Massachusetts General Brigham), as they discuss private sector initiatives and responsibility to advance health equity.

The first episode goes live tomorrow.

About Health Affairs

Health Affairs is the leading peer-reviewed journal at the intersection of health, health care, and policy. Published monthly by Project HOPE, the journal is available in print and online. Late-breaking content is also found through healthaffairs.org, Health Affairs Today, and Health Affairs Sunday Update.

Project HOPE is a global health and humanitarian relief organization that places power in the hands of local health care workers to save lives across the globe. Project HOPE has published Health Affairs since 1981.

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