As some 10,000 Americans reach retirement age every day, they’re faced with a crucial decision about their health care: Which Medicare plan should I choose? More and more of these newly eligible Medicare recipients are reaching the same answer to that complex question: Medicare Advantage.
Offered by private insurers, Medicare Advantage plans are somewhat of a “one-stop shop” for Medicare, often bundling in a wide range of services, such as coverage for dental care and prescription drugs, along with doctor and hospital visits. The comprehensive nature of the coverage available with Medicare Advantage plans makes them reminiscent of the employer-sponsored health insurance many boomers are accustomed to.
The number of people enrolled in Medicare Advantage, also known as Medicare Part C, has grown robustly for more than a decade, from 5.3 million people in 2004 to approximately 20 million people in 2017. They now account for about 34 percent of all Medicare enrollees, according to the Centers for Medicare & Medicaid Services. (Click hereOpens a new window for a quick review of the various parts of Medicare and what they cover.)
How Medicare Advantage rewards better and more affordable care
But while the all-in-one simplicity of Medicare Advantage may be what initially draws many people to enroll, experts say the real driving force behind its growth is a set of incentives designed to improve how care is coordinated among doctors, hospitals, pharmacists and other providers. These incentives help improve the quality of care patients receive and deliver the best bang for the buck when it comes to health care spending.
“One of the biggest contributors to poor quality of care is poor coordination — one provider doesn’t know what the other provider is doing,” said Paul Cotton, director of federal affairs for the National Committee for Quality Assurance (NCQA), an independent nonprofit group that works to improve health care quality by employing evidence-based standards and accreditation.
To address that shortcoming, many Medicare Advantage plans incentivize doctors and other health care providers in their network to improve care coordination. These incentives can be delivered in a variety of formats, ranging from pay-for-performance agreements that reward doctors for meeting certain quality metrics all the way to “shared-risk” accountable care relationships where the Medicare Advantage plans and care providers take joint responsibility for improving health outcomes while lowering costs.
Regardless of the nature of the incentive structure a Medicare Advantage plan uses, the goal is the same: to enhance the health and well-being of plan members by rewarding their doctors for delivering high-quality care.
“That has substantially increased the quality of Medicare Advantage programs,” Cotton said.
The Centers for Medicare & Medicaid Services (CMS) annually assigns star ratings to Medicare Advantage plans based in part on how well plan members do on measures such as readmission to a hospital after treatment and how closely they follow the prescription drug regimen their doctor prescribed. The proportion of highly rated four- and five-star plans is now at 49 percent, up from 31 percent in 2012, Cotton noted. CMS is the government agency that oversees the plans.
Am I receiving coordinated care? How to tell.
For many people, care coordination is an unfamiliar concept. And for those in good health who see a doctor once or twice a year, it may not feel like something that warrants much time or energy to understand. But as we age, we tend to use more health services, often to manage chronic health conditions. About 80 percent of Americans 65 and older have at least one chronic medical condition, and 68 percent have two or more, according to the National Council on Aging.1
So, for seniors, actively seeking coordinated care can be well worth the effort, not only because it can help increase the odds that they’ll maintain their health and well-being for as long as possible, but also because it can make their experience as a health care consumer easier and less complicated.
One way to know that you’re getting coordinated care is if your doctor routinely keeps tabs on all the different kinds of health care you are receiving, even if it’s not in his or her office.
“Do they know you went to the hospital? Do they know what medications you’re on? Do they have that information easily?” said Dr. Efrem Castillo, chief medical officer for UnitedHealthcare Medicare & Retirement. UnitedHealthcare is the largest provider of Medicare Advantage plans, with more than 4.3 million enrollees.2 “In traditional Medicare, there’s just no way to know, unless you ask the patient. And sometimes the patient doesn’t know, or won’t remember. Medicare Advantage, by design, actually has to do those things. It really does help coordinate the care.”
Castillo noted that Medicare Advantage plans make a “concerted effort” to ensure a patient is, for example, getting screening tests they need — such as a colonoscopy or a mammogram — rather than relying on the patient alone to navigate the system. The company annually recognizes care providers in its network with the UnitedHealthcare PATH Excellence in Patient Service Awards for addressing these sorts of care opportunities when caring for its Medicare Advantage members.
People in search of coordinated care can also explore whether a Patient-Centered Medical Home (PCMH) is available in their community.
“Patient-Centered Medical Homes specifically earn their recognition by working very diligently to coordinate care for their enrollees — making sure that they follow up when they make referrals, helping them to get the support they need in the community,” Cotton said. “When we’ve done focus groups with patients who are in Patient-Centered Medical Homes, they say that’s one of the big things they’ve noticed is that all of a sudden, their care is being coordinated, and that they aren’t on their own anymore, that somebody’s watching their back, helping them make sure they get the services they need.”
CMS designed Medicare Advantage plans to encourage that system of coordinating care between doctors, hospitals and other health care providers.
“CMS has become very elegant about the way they look at some of the outcome measures, like the star ratings. They’ve become very smart about that,” said Castillo, who started practicing medicine in 1995 as a primary care physician.
For example, after every hospital discharge, CMS mandates that Medicare Advantage plans check to make sure patients are taking the right medicines, thereby reducing the risk of things like people doubling up on previously prescribed medication.
“That’s really smart,” Castillo said. “It’s something you can measure, something that would drive a better outcome. It’s something that improves care for everybody.”
Why a Medicare Advantage plan may not be available in your area
So, if Medicare Advantage has these benefits of coordinating care and controlling costs, why isn’t it even more popular among Medicare enrollees? Sometimes, it’s a matter of geography.
“In a rural area, it’s very hard for a Medicare Advantage plan to put together a network and negotiate with providers to get the best rates because there aren’t a lot of providers to choose from,” said Cotton of the NCQA.
For example, the percentage of Medicare enrollees in Alaska who’ve selected a Medicare Advantage plan hovered at less than 1 percent in 2016, according to the Kaiser Family Foundation, sharply lower than the national average.
Despite those geographic limitations, many experts expect Medicare Advantage enrollment to continue growing steadily, “in part because the pay-for-performance system is working so well,” Cotton said.
Tips for selecting a Medicare Advantage plan
For many people, the first step to finding a Medicare Advantage plan that’s a good fit for their needs is to see if their doctor is part of the plan they want to select. And calling the plan to ask some questions can give you more information on which to base your decision. You could ask, for example, if the plan offers any special programs to help people manage certain chronic conditions or any support to help members manage doctor appointments and follow-up care after a hospitalization.
You can also use the Medicare.gov “Plan Finder” tool. Just plug in your ZIP code along with some other personal details, and the tool will show you a list of all the plans available to you, including additional details about their costs, benefits and star ratings.
“You can go into those star ratings and peel them apart to see how they do on particular kinds of conditions, [such as diabetes],” Cotton said. “That would help them really narrow their search.”
2CMS enrollment data, 2017
Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies, a Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan’s contract renewal with Medicare.