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Building the Case for Medicare Advantage

Last update on: Feb 02 2017

The Medicare Advantage alternative to traditional Medicare is increasing in popularity among beneficiaries but it isn’t popular among many Washington politicians. They’ve been trying to strangle the system for several years. They claim it costs too much. But that might not be the case. Take a look at this piece by someone who used to think the case against Medicare Advantage was an easy one but says the latest research is making him reconsider. Medicare Advantage plans deliver better care for the additional money they cost, and that could save big bucks down the road.

There are reasons Medicare Advantage plans might promote higher-quality care. So long as beneficiaries don’t switch among plans too rapidly (and the evidence is that once they select a plan, they tend to stick with it), plans have a financial incentive to keep their enrollees healthy, incurring less downstream cost. It’s possible, therefore, that they may offer incentives to providers to perform preventive services.

Moreover, in contrast to traditional Medicare, which must reimburse any provider willing to see beneficiaries enrolled in the program, Medicare Advantage plans establish networks of providers. This permits them, if they choose, to disproportionately exclude lower-quality doctors, ones who do not provide preventive services frequently enough, for example.

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