Performance Improvement 2011-2012. How Are Market Forces Operating in the Medicare Advantage Program?

01/01/2012

Researchers constructed a multi-year analysis file containing data on plan participation, enrollment, disenrollment, benefit design, quality, and county characteristics. The project included a descriptive analysis of plan-level changes in Medicare Advantage (MA) enrollment and disenrollment, an examination of the relationship between enrollment and disenrollment patterns and plan characteristics such as premiums, benefits and quality, a literature review on the functioning of competitive forces in the marketplace, and an environmental scan of efforts by private purchasers and States to introduce pay for performance (P4P) methods at the health plan level.

MA enrollment grew between 2007 and 2008. One-third of beneficiaries enrolled in MA had some change in plan or status, either voluntary or involuntary. Voluntary disenrollments, which occurred in 15 percent of all enrollments, accounted for the majority of all disenrollments for all plan types except Private Fee-For-Service (PFFS) plans, whose large proportion of involuntary disenrollments were driven by plan terminations. The rapid disenrollment rate—a measure of the proportion of new enrollees who disenrolled within the first three months of enrollment—was about 9 percent on average for individual market MA plans overall. The MA program continued to expand in 2009. Health Maintenance Organizations continued to account for the majority of MA enrollees, and to provide better value in terms of average premium and benefits, while PFFS plan enrollment slowed. Plan premiums and basic benefits, such as prescription drug benefits, are key drivers of enrollment at the plan/county level. Available data on MA quality indicators provided little evidence of improvement over time among those plans reporting. The environmental scan found that some State Medicaid programs and private purchasers have been using P4P to incentivize and improve health plan performance.

Report Title: Analysis of the Medicare Advantage Marketplace
Agency Sponsor: OASPE-OHP, Office of Health Policy
Federal Contact: Audrey McDowell, 202-690-7770
Performer: Mathematica Policy Research
Record ID: 9625 (Report issued November 1, 2009)

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