Health insurers have been telling us for years that their Medicare Advantage plans, which are federally funded but privately run alternatives to traditional fee-for-service Medicare, can provide better care—at lower cost—than the government.
One of my priorities when I worked in the industry was to perpetuate that notion. And I believed the PR, so much so that I encouraged my own parents to enroll in a Medicare Advantage plan. But is the PR true? The answer is, we don’t know, and we may never know.
That’s because, as health economist and researcher Austin Frakt pointed out in a commentary last week in The Incidental Economist, neither the federal government nor the insurers that operate Medicare Advantage plans will make the data available to enable apples to apples comparisons.
The lack of data hasn’t stopped the insurance industry from continuing the PR campaign. Whenever the Medicare Advantage program is threatened with a funding cut, the industry makes sure thousands of enrollees in the plans contact their Congressional representatives, and industry executives request opportunities to testify before friendly lawmakers about the superiority of Medicare Advantage plans.
In September 2012, for example, Karen Ignagni, then-CEO of America’s Health Insurance Plans, read a long list of Medicare Advantage’s supposed advantages to members of the House Ways and Means Committee. Many of them were indisputably true. Medicare Advantage plans are able to offer enrollees richer benefits because the federal government has for years overpaid insurers to encourage them to participate in the Medicare Advantage program.
Ignagni told the committee that 78 percent Medicare Advantage plan enrollees are in plans that cap their annual out-of-pocket maximums at $5,000. People enrolled in traditional Medicare often have to pay more, sometimes much more, if they need expensive care.
Ignagni also ticked off a number of additional services and benefits that only Medicare Advantage enrollees receive, such as vision, hearing and dental benefits, case management services, disease management programs and nurse help hotlines.
And she indicated that the care provided through Medicare Advantage plans produces better outcomes because of the ability of the insurers to coordinate care better than traditional Medicare. Medicare Advantage plans’ coordinated care programs “provide for the seamless delivery of health care services across the continuum of care,” she said.
Ignagni’s information was based on various studies that have been conducted over the past several years, some of which have been commissioned (and paid for) by the industry. At the 2012 House committee hearing, for example, Ignagni cited a study concluding that the Medicare Advantage hospital readmission rate was about 13 percent to 20 percent lower than in the Medicare fee-for-service program. She didn’t mention in her testimony that the study was conducted by MedAssurant, Inc. (now known as Inovalon), a company that did data analysis for her trade group.