Medicare Advantage Enrollment and Total Medicare Program Spending

Area of Science:

• Health Economics
• Public Health Policy
• Healthcare Management

Background:

• Medicare Advantage (MA) enrollment has surged in the past two decades.
• Medicare program spending per capita has concurrently moderated.
• The impact of MA growth on Medicare spending remains an open question.

Purpose of the Study:

• To estimate the association between Medicare Advantage penetration and total Medicare spending per capita.
• To analyze the relationship between the percentage of Medicare beneficiaries in MA plans and overall program costs.

Main Methods:

• Linear regression models were used to examine county-level data from 2012 to 2021.
• Data included Medicare spending and enrollment (MA, Fee-for-Service, Part D) across 3045 U.S. counties.
• Risk scores were adjusted for coding intensity in MA plans.

Main Results:

• Higher MA penetration was associated with lower Medicare spending per capita.
• A 10 percentage point increase in MA penetration correlated with $194 lower spending per capita (1.5% reduction).
• After risk score adjustment, a 10 percentage point MA increase was linked to $146 lower spending per capita (1.1% reduction).

Conclusions:

• Higher Medicare Advantage enrollment may have moderated total Medicare program spending.
• The findings suggest a potential cost-saving effect of increased MA penetration.
• Further research is needed to confirm the causal nature of these associations.