Medicare Advantage's geographic disparities
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Private Medicare plans now cover more than half of Medicare beneficiaries, but how well they actually serve people differs from county to county.
Why it matters: Medicare enrollees living in communities of color and with high rates of poverty had less access to top-rated Medicare Advantage plans last year than those living in wealthier places that are majority white.
- These disparities could contribute to unequal health outcomes for seniors across the country as Medicare Advantage enrollment grows, particularly among seniors from diverse and low-income backgrounds.
The big picture: The geographic quality differences in Medicare availability drive home the longstanding point that where someone lives in America can determine the caliber of their health care options.
- "Nobody can really easily move to another location to get the health care services they need," said Jeannie Fuglesten Biniek, associate director of KFF's program on Medicare policy.
- "It's even harder for people who are Medicare beneficiaries."
- Geographic disparities in health insurance extend beyond Medicare Advantage. Health care quality and availability differs significantly among states, and experts fear the chasm could deepen as some states purge Medicaid rolls following the pandemic.
Context: The federal government uses dozens of indicators of quality to rate Medicare Advantage offerings on a five-star scale. The effectiveness of the scores, which are meant to help consumers pick a health plan, is debated, but insurers get extra federal dollars for earning high ratings regardless.
- Insurers use that bonus money to lower premiums and offer extra benefits like dental coverage, medically tailored meals and fitness subsidies. That means plans with a pattern of lower star ratings have less money to fund supplemental benefits.
Driving the news: Medicare Advantage plans offered in more disadvantaged counties were less likely to be rated 4.5 stars or higher, according to research published last week in JAMA Network Open.
- The researchers sorted counties based on a CDC index that measures 16 factors, including rates of poverty, single parents, unemployment and English proficiency in a geographic area.
- "People who might need [supplemental] benefits the most might also be least likely to be in plans that can fund these benefits," said Avni Gupta, a co-author of the study who is now a researcher at the Commonwealth Fund.
- The paper echoes earlier studies that found enrollees of racial and ethnic minority backgrounds have access to fewer high-rated plans, and research identifying disparities in hospitalizations for racial and ethnic minority enrollees among lower-rated MA plans.
Between the lines: Government payments to Medicare Advantage plans are already geographically adjusted according to various factors, including average traditional Medicare spending per beneficiary.
- Still, those adjustments "do not capture the measures that we found might be... driving disparities in outcomes that we see," Gupta said.
- The Centers for Medicare and Medicaid Services will change part of its star ratings bonus system in 2027 to reward plans that improve care for disadvantaged populations and has introduced other changes to the star ratings methodology, a spokesperson told Axios.
- But some insurers say the new system could increase inequities, as not all plans will be eligible for the new bonus system.
- CMS should also consider the socioeconomic dynamics of the local market when assessing plans' quality ratings, or raise payment benchmarks for vulnerable counties to make sure plans in those communities have adequate resources, the authors argue.
Reality check: About 75% of the more than 33 million Medicare Advantage enrollees are in a plan that earned four or more stars this year, according to CMS.
- AHIP, the health insurance trade group, pointed to studies showing overall high quality outcomes in Medicare Advantage when asked about geographic differences in MA plan quality.
Zoom out: The Biden administration and some lawmakers have ramped up scrutiny of Medicare Advantage plans over the past couple years following reports of predatory marketing schemes, overuse of pre-authorization requirements and data suggesting the plans are overpaid.
- "[I]t is time for structural inequities in MA plan offerings to be added to the list of concerns," Brad Wright, a health policy professor at the University of South Carolina, wrote in an editorial published in JAMA alongside the research.
