Medicare's Bending Cost Curve. July 28, 2014. VI. Spending Growth Trends in Medicare Advantage

07/28/2014

Most of this issue brief has focused on the traditional Medicare program due to the availability of Medicare claims data to analyze service category level spending trends. Spending growth in the MA program has been affected by various factors in recent years including: enrollment growth; changes in provider network requirements for private fee-for-service plans under the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA); a transition to traditional Medicare-based payment rates to reduce overpayments to plans under the Affordable Care Act; quality bonus payments provided to MA plans; and increases in MA risk scores relative to the traditional Medicare program.18 As displayed in Figure 3, there has been greater variability in per enrollee spending growth for the MA program from year-to-year than in the traditional Medicare program. However, over time, the rate of growth in per enrollee MA program spending has also slowed in recent years. This slower growth in MA payments has been accompanied by continued increases in plan enrollment (up by more than 40% since passage of the ACA) and a nearly 10% decline in premiums paid by MA enrollees since passage.

Maps 1 and 2. Ratio of 2009-2012 to 2000-2008 Average Medicare per Enrollee Spending Growth Rate by Hospital Referral Region

Map 1 Ratio of 2009-2012 to 2000-2008 Average Medicare per Enrollee Spending Growth Rate by Hospital Referral Region

Map 2: Ratio of 2009-2012 to 2000-2008 Average Medicare per Enrollee Spending Growth Rate by Hospital Referral Region

Data Source for Spending Growth: CMS Medicare Beneficiary Summary File


Figure 3

Per Enrollee Spending Growth in Traditional Medicare and Medicare Advantage, 2006-2012

Figure 3: Per Enrollee Spending Growth in Traditional Medicare and Medicare Advantage, 2006-2012

Data Sources: Data on traditional Medicare program spending from the CMS Master Beneficiary Summary File. Data on Medicare Advantage from the annual Trustees Reports.


18  The Medicare Advantage Program in 2014 (Washington, D.C.: The Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, 7 April 2014) <http://aspe.hhs.gov/health/reports/2014/medicareadvantage/ib_medicareadv... [accessed 17 July 2014]; Richard Kronick and W. Pete Welch, ‘Measuring Coding Intensity in the Medicare Advantage Program’, Medicare & Medicaid Research Review, 4 (2014), E1–E19.

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