Nikki Haley’s Medicare Advantage

A new study shows insurer competition reduces costs

WSJ editorial. Excerpts:

"Medicare Advantage plans are growing rapidly and cover about half of the entitlement’s beneficiaries. Private insurers administer the plans and are paid by Medicare per beneficiary. Insurers compete for patients by offering benefits, including vision and dental care that aren’t available in traditional fee-for-service Medicare.

Lower premiums have made Advantage plans popular in particular among low-income seniors. Plans are able to offer more benefits at lower cost in part by reducing unnecessary care and expensive hospital stays.

Avalere, a healthcare consulting firm, analyzed utilization rates in traditional Medicare versus Advantage plans. After adjusting for disease and demographics, Avalere found that fee-for-service utilization was 12% higher for skilled nursing homes and 37% higher for hospital inpatient care in 2019."

"private insurers have a financial incentive to keep patients out of the hospital by improving adherence to treatments and coordination of care."

"If fee-for-service utilization rates were similar to those in the Advantage program, Avalere projects that the hospital trust fund would remain solvent until 2048." [instead of the projected 2031)

"the Administration is resorting to brute government force to curb Medicare spending: restricting access to new Alzheimer’s treatments, imposing price controls on other medicines, and reducing reimbursements to doctors."

"Medicare’s low reimbursement rates are driving doctors to leave private practice for hospitals, which reduces provider competition and increases healthcare spending."