Medicare Advantage: The Role of Private Plans

Of particular interest in policy discussions about Medicare’s future is the role of private plans relative to the traditional government-run Medicare program. Currently, Medicare beneficiaries have a choice between obtaining their benefits from Traditional Medicare or private Medicare Advantage plans. The proportion of beneficiaries who are in private plans has grown steadily over the past decade, to almost 30%, but relatively little is known about the benefits offered by these plans, or their quality and costs. In addition, several policies that would expand the role of private plans substantially have been proposed; to understand these proposals and their implications better, more analysis is needed of plan costs and payments and how they vary across local areas. This project will: (1) analyze the implications of policies enacted in the Affordable Care Act on the relationship between Medicare Advantage costs and payments across geographic areas and by type of plan; and (2) examine the implications of proposals to convert Medicare into a premium support model for plans and beneficiaries, as well as program spending.