Medicare Advantage: what explains its robust health?

The Medicare Advantage (MA) program continues to grow and thrive, despite plan payment cuts imposed through the Affordable Care Act. What explains this surprising outcome (one that is strikingly different than the experience of MA plans in the late 1990s, when payment cuts led to dramatic shrinkage in enrollment and curtailment of plans)? This analysis argues that a combination of factors, including the way payment cuts were imposed, the plan offerings, the characteristics of beneficiaries, and the way they make choices together explain the program's current health. Understanding these factors is important for MA, Medicare, and, more generally, for participants in new payment models.