The Medicare system is facing unprecedented care and cost challenges. An aging population, medical cost growth and inefficiencies in care continue to stretch our nation’s resources, burden taxpayers and threaten economic well-being. Medicare Advantage can help Medicare overcome its challenges and achieve the goal of high-quality, affordable and accessible healthcare for seniors and people with disabilities.
Why does the healthcare system need a strong and stable Medicare Advantage program?
- Aligned incentives: Medicare Advantage plans are paid a flat fee per member per month, so they have an incentive to integrate care, operate efficiently, and keep people healthy and out of the hospital. Medicare fee-for-service pays only based on the volume of care provided, and is designed primarily to process claims, not to be a coordinated health program in the same way as Medicare Advantage.
- Quality and outcomes: Medicare Advantage plans have proven their ability to deliver patients higher-quality care, according to a 2015 report in The American Journal of Managed Care. These plans also get patients more of the services they need, notes a 2013 article in Health Affairs magazine. Beyond these benefits, Medicare Advantage plans prevent more hospitalizations, readmissions, and other complex care that are among the biggest cost drivers in the health system, according to a 2012 article in The American Journal of Managed Care.
- Innovative approaches: Medicare Advantage plans have pioneered many of the innovations that policy experts say the healthcare system needs, including integrated delivery systems, care coordination, an emphasis on primary care, and value-based approaches to paying doctors, hospitals, and other healthcare professionals. Humana Medicare Advantage members served by physicians under value-based care arrangements had 6 percent fewer inpatient hospital admissions per thousand members in 2016 compared with members who were treated by providers in traditional fee-for-service relationships.
- Widespread adoption: About 31 percent of Medicare beneficiaries choose Medicare Advantage, with more than 17 million currently enrolled. The vast majority of enrollees stay with their plans once they join and report high rates of satisfaction, notes the Medicare Payment Advisory Commission.
- A safety net: A large percentage of low-income patients and minorities rely on Medicare Advantage plans as a vital health resource, according to a 2015 report by America’s Health Insurance Plans (AHIP). They are the types of enrollees that can benefit the most from the plans’ level of access to high-quality, coordinated care.
Medicare Advantage requires reliable funding and a regulatory environment that allows health plans to innovate, improve patient outcomes and lower costs for the entire health system. Strength and stability in the Medicare Advantage program is essential for its millions of beneficiaries, for those who will enroll in the future, and for the Medicare system as a whole.
January 1, 2017
To learn more about how Humana’s Medicare Advantage programs benefit patients, look at this article.