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Five Reasons to Celebrate the 20th Anniversary of Medicare Advantage

Unless you’re a political junkie or an avid follower of economic policy, chances are you don’t remember much about the Balanced Budget Act of 1997, and based on the name alone, it may not sound like life-changing stuff. But as it turns out, it helped revolutionize health care for older adults over the last 20 years.


In 1997, 5.2 million people (14 percent of Medicare beneficiaries) opted to get their Medicare benefits from a private company rather than through Original Medicare. The enactment of the Balanced Budget Act in August 1997 led to the creation of a program called Medicare + Choice that dramatically expanded the private plan options available to consumers. Today that program is known as Medicare Advantage.

Over the past 20 years, the number of people enrolled in Medicare Advantage plans has more than tripled to nearly 20 million as of August 2017 – just over a third of beneficiaries. ⁱ Growth in recent years is especially impressive, with 71 percent more people enrolled in Medicare Advantage plans today than in 2010.

“Trust is at the core of the increasing popularity,” said Brian Thompson, CEO of UnitedHealthcare Medicare & Retirement, the largest provider of Medicare Advantage plans nationwide. “The quality improvements that we’ve seen show how Medicare Advantage has invested in care coordination and in proactively ensuring that people are getting the care they need, and that has driven a level of trust.”

Beyond its popularity, Medicare Advantage has made meaningful contributions to the strength of the U.S. health care system as well as the health and well-being of the country’s senior population in the past two decades.

So, in observance of the 20th anniversary of Medicare Advantage, let’s highlight five of its most notable achievements and how they’ve impacted America’s seniors.

Here’s To Your (Better) Health

Several studies have shown that people on Medicare Advantage have better health outcomes than those with Original Medicare benefits.

In 2013, Boston Consulting Group (BCG) consultants analyzed 3 million Medicare claims and found that Medicare Advantage patients fared better than Original Medicare patients on several key measures.

When they were admitted to the hospital, Medicare Advantage patients spent less time there and were less likely to be readmitted within 30 days of leaving, indicating they had fewer complications. They were also more likely to receive preventive care to keep chronic illnesses in check. For example, people with diabetes were more likely to be tested for kidney function and glycated hemoglobin, which increases the risk of cardiovascular disease and other complications. Possibly as a result, diabetics with Medicare Advantage were less likely to have a foot amputated or need surgery for foot ulcers.

These outcomes can be attributed in part to Star Ratings, the government’s quality rating system for Medicare Advantage plans. Plans earn one to five stars based on an evaluation of the quality of care their members receive, using a combination of objective measures, such as the number of preventive screenings performed, as well as subjective ones, such as how much members like their plans.

But Jon Kaplan, who leads BCG’s health care innovation and transformation team for the Americas, believes Medicare Advantage patients also fare better because private companies often encourage them to see providers in their networks who’ve proven capable of delivering positive health outcomes for their patients. Many private plans also reward doctors, pharmacies and hospitals for providing high-quality care. And perhaps most importantly, according to Kaplan, they manage patients’ care, ensuring that primary care doctors, hospitals and specialists coordinate with one another.

All of these efforts are designed to keep patients healthy while simultaneously saving money since they’re much cheaper than paying for preventable surgeries and hospital visits.

“The person managing my care in the fee-for-service world is me, the patient—but I don’t really know how the system works,” Kaplan said. “Would I do all the preventive measures that would get me in front of a disease? Sure, maybe if I get to the right provider who could help me navigate. But physicians are often rewarded based on volume of care delivered. I’m not convinced they’re going to spend the time to learn about me or the complexities of my disease.”

While some critics equate managing care with limiting care, a recent studyOpens a new window suggests that care coordination actually encourages better care the first time around.

Researchers found that Medicare Advantage patients were less likely to be admitted to an inpatient rehabilitation or skilled nursing facility after a hospitalization for heart failure, stroke, or a hip or knee replacement, and they spent less time in skilled nursing facilities when they were admitted. Nevertheless, the Medicare Advantage patients were less likely to be readmitted back to the hospital within 30 to 90 days after being discharged, even though the study accounted for the clinical severity of patients in the analysis.

“Based on our data, Medicare Advantage patients received less intense post-acute care and exhibited better outcomes,” said Peter Huckfeldt, the lead researcher and an assistant professor in the Division of Health Policy and Management at the University of Minnesota’s School of Public Health.

Check back tomorrow for the second of five Medicare Advantage achievements we’re highlighting in celebration of the program’s 20th anniversary this year.


Think Medicare Advantage could be right for you? Check out the plans available in your area by using the Plan Finder on www.Medicare.gov, or visit www.UHCMedicareSolutions.com to learn more about UnitedHealthcare’s Medicare Advantage plans. You can make changes to your coverage during Medicare Open Enrollment, which ends on Dec. 7.


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. 

Y0066_171023_143001 Accepted

i CMS enrollment data, 2017