Do People Who Sign Up for Medicare Advantage Plans Have Lower Medicare Spending?
| Table 1. Average Traditional Medicare Spending in 2015 for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, After Adjusting for Health Risk Factors | |||||
| Characteristics in 2015 | People who stayed in TM in 2016 | People who switched to MA in 2016 | Difference in spending, 2015 | ||
| Number of people | Average Part A & B spending, 2015 | Number of people | Average Part A & B spending, 2015 | ||
| Overall | 23,714,780 | $9,362 | 443,240 | $8,109 | $1,253 |
| Age | |||||
| Under 35 | 314,880 | $8,631 | 8,220 | $7,476 | $1,155 |
| 35-44 | 527,740 | $8,778 | 15,020 | $7,603 | $1,175 |
| 45-54 | 1,030,820 | $8,549 | 36,140 | $7,405 | $1,144 |
| 55-59 | 801,600 | $8,362 | 31,180 | $7,243 | $1,119 |
| 60-64 | 904,460 | $8,108 | 41,120 | $7,023 | $1,085 |
| 65-69 | 3,360,240 | $8,365 | 79,480 | $7,246 | $1,119 |
| 70-74 | 5,598,560 | $9,229 | 96,280 | $7,994 | $1,235 |
| 75-79 | 4,341,380 | $9,592 | 63,060 | $8,309 | $1,284 |
| 80-84 | 3,175,960 | $9,687 | 37,900 | $8,391 | $1,296 |
| 85-89 | 2,218,880 | $9,819 | 21,260 | $8,505 | $1,314 |
| 90-94 | 1,089,460 | $10,235 | 10,340 | $8,865 | $1,370 |
| 95 and older | 350,800 | $11,409 | 3,240 | $9,883 | $1,527 |
| Dual eligibility | |||||
| Non-dual eligible | 19,132,740 | $9,779 | 281,300 | $8,471 | $1,309 |
| Partial dual eligible | 1,257,160 | $8,536 | 61,580 | $7,394 | $1,142 |
| Full dual eligible | 3,324,880 | $8,681 | 100,360 | $7,520 | $1,162 |
| Original reason for eligibility | |||||
| Disabled | 5,757,400 | $9,234 | 190,840 | $7,999 | $1,236 |
| Aged | 17,957,380 | $9,471 | 252,400 | $8,204 | $1,267 |
| Gender | |||||
| Female | 13,211,740 | $9,320 | 240,420 | $8,073 | $1,247 |
| Male | 10,503,040 | $9,500 | 202,820 | $8,229 | $1,271 |
| Institutional status | |||||
| Community resident | 13,363,540 | $9,684 | 267,420 | $8,388 | $1,296 |
| Institutional resident | 1,205,040 | $13,638 | 21,880 | $11,813 | $1,825 |
| Unknown | 9,146,200 | $7,559 | 153,940 | $6,548 | $1,011 |
| Chronic conditions | |||||
| Anemia | 5,212,220 | $11,148 | 86,360 | $9,657 | $1,492 |
| Rheumatoid arthritis | 7,987,660 | $10,244 | 136,800 | $8,873 | $1,371 |
| Asthma | 2,077,200 | $10,534 | 42,740 | $9,125 | $1,410 |
| Atrial fibrillation | 2,160,960 | $10,096 | 24,240 | $8,745 | $1,351 |
| Breast or prostate cancer | 1,581,540 | $12,274 | 18,920 | $10,757 | $1,517 |
| COPD | 2,767,340 | $10,103 | 54,960 | $8,751 | $1,352 |
| Congestive heart failure | 3,199,460 | $8,884 | 51,220 | $7,695 | $1,189 |
| Depressive disorders | 6,273,440 | $9,985 | 139,940 | $8,787 | $1,198 |
| Diabetes | 6,592,380 | $8,013 | 136,920 | $6,941 | $1,072 |
| Epilepsy | 594,560 | $9,403 | 13,180 | $8,145 | $1,258 |
| Hypothyroidism | 3,865,660 | $8,540 | 57,540 | $7,398 | $1,143 |
| Ischemic heart disease | 6,792,700 | $9,314 | 107,780 | $8,068 | $1,246 |
| Kidney disease | 4,279,460 | $9,414 | 73,760 | $8,154 | $1,260 |
| Liver disease | 790,800 | $11,631 | 17,040 | $10,074 | $1,556 |
| Mobility impairments | 577,820 | $12,766 | 11,120 | $11,058 | $1,708 |
| Obesity | 2,942,860 | $9,687 | 69,620 | $8,503 | $1,184 |
| Peripheral vascular disease | 2,888,480 | $9,219 | 47,420 | $7,985 | $1,234 |
| Pressure ulcers | 993,360 | $12,827 | 16,060 | $11,110 | $1,716 |
| Schizophrenia | 452,120 | $10,686 | 13,840 | $9,256 | $1,430 |
| Stroke/TIA | 907,500 | $11,935 | 15,180 | $10,338 | $1,597 |
| No. of chronic conditions | |||||
| 0 | 4,513,760 | $1,687 | 93,200 | $1,461 | $226 |
| 1 | 4,483,440 | $3,823 | 82,120 | $3,311 | $512 |
| 2 | 4,105,140 | $5,694 | 74,140 | $4,932 | $762 |
| 3 | 3,225,380 | $7,701 | 59,420 | $6,670 | $1,030 |
| 4 | 2,357,580 | $9,846 | 44,160 | $8,529 | $1,318 |
| 5 | 1,666,820 | $12,173 | 29,760 | $10,544 | $1,629 |
| 6 | 1,164,460 | $14,436 | 20,940 | $12,504 | $1,932 |
| 7 | 801,800 | $16,222 | 14,660 | $14,052 | $2,171 |
| 8 | 544,880 | $18,120 | 10,040 | $15,696 | $2,425 |
| 9 | 357,240 | $19,197 | 6,080 | $16,628 | $2,569 |
| 10 or more | 494,280 | $20,725 | 8,720 | $17,952 | $2,773 |
| NOTE: All values shown were risk adjusted using a model similar to the CMS HCC Risk Adjustment Model. Excludes beneficiaries in Puerto Rico and those who enrolled in cost, Medicare Medical Savings Account (MSA), PACE plans, Medicare-Medicaid Plans (MMPs) and employer group health plans. Excludes beneficiaries with end-stage renal disease. Excludes people who died before the end of 2015. Excludes people not enrolled in Medicare prior to 2013. TM is traditional Medicare. MA is Medicare Advantage. Only chronic conditions with at least 10,000 people switching to Medicare Advantage are shown in table. SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016. |
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| Table 2. Results from Multivariate Regression of Traditional Medicare Spending in 2015 for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, Adjusting for Risk Factors Included in the CMS HCC-Risk Adjustment Model | ||
| Coefficients | Estimate | Std. Error |
| Intercept | 7.109633 | 0.009402 |
| Switching | -0.143651 | 0.0142682 |
| Gender: Male | referent category | |
| Female | -0.0110686 | 0.0117174 |
| Age 0-34 | -0.0712961 | 0.025248 |
| 35-44 | -0.0163406 | 0.021451 |
| 45-54 | -0.0408814 | 0.0170427 |
| 55-59 | -0.06427 | 0.0179617 |
| 60-64 | -0.0190008 | 0.017056 |
| 65-69 | referent category | |
| 70-74 | 0.0873604 | 0.0095115 |
| 75-79 | 0.1411297 | 0.0101946 |
| 80-84 | 0.1577402 | 0.0112485 |
| 85-89 | 0.1494632 | 0.0130799 |
| 90-94 | 0.1666209 | 0.018159 |
| 95+ | 0.3183193 | 0.0344025 |
| Dual eligibility: Non-duals | referent category | |
| Partial duals | -0.1038725 | 0.0282699 |
| Full duals | -0.1306216 | 0.0198355 |
| Community residents | referent category | |
| Institutional residents | 0.4165534 | 0.0333449 |
| Missing residency status | -0.2392473 | 0.0071132 |
| Original reason for entitlement: Aged | referent category | |
| Disabled | -0.0033169 | 0.0138178 |
| Chronic conditions/HCC codes | ||
| Acute MI | 0.810567 | 0.0252134 |
| Anemia | 0.3412536 | 0.0120288 |
| Asthma | 0.1515625 | 0.0151335 |
| Atrial fibrillation | 0.1202888 | 0.0153342 |
| Blindness | 0.1981732 | 0.0244406 |
| Brain injury | 0.2645299 | 0.0313467 |
| Breast or Prostate cancer | 0.2771732 | 0.0132984 |
| Cerebral palsy | -0.0489468 | 0.033602 |
| Chronic kidney disease | 0.154923 | 0.0152935 |
| Colorectal cancer | 0.4436472 | 0.0204056 |
| Congestive heart failure | -0.0452462 | 0.05673 |
| COPD | 0.2339984 | 0.0398189 |
| Cystic fibrosis | 0.034797 | 0.0282677 |
| Depressive disorders | 0.0929828 | 0.0119425 |
| Diabetes | -0.1646257 | 0.0151394 |
| Endometrial cancer | 0.4495853 | 0.0356021 |
| Epilepsy | 0.2226373 | 0.0456154 |
| Hepatitis | 0.1817627 | 0.0225243 |
| Hip/Pelvic fracture | 0.9409028 | 0.0247483 |
| HIV/AIDS | 0.0927405 | 0.0346999 |
| Hypothyroidism | -0.1240166 | 0.0120557 |
| Ischemic heart disease | -0.0107028 | 0.0119693 |
| Leukemia | 0.5217791 | 0.0189631 |
| Liver disease | 0.2347011 | 0.0150768 |
| Lung cancer | 0.6364471 | 0.0232583 |
| Mobility impairments | 0.3394306 | 0.0170233 |
| Multiple sclerosis | 0.4343622 | 0.0308529 |
| Muscular dystrophy | 0.7138206 | 0.0798967 |
| Obesity | 0.0173455 | 0.0123963 |
| Peripheral vascular disease | -0.0216004 | 0.0124903 |
| Personality disorders | 0.1777524 | 0.02434 |
| Pressure ulcers | 0.485386 | 0.0206655 |
| PTSD | 0.0428833 | 0.0225038 |
| Rheumatoid arthritis | 0.1957197 | 0.0116852 |
| Schizophrenia | 0.1277205 | 0.0207238 |
| Spina bifida | 0.2069589 | 0.0493435 |
| Spinal cord injuries | 0.4995232 | 0.0333971 |
| Stroke/TIA | 0.2737327 | 0.0149603 |
| No. of chronic conditions – 0 | referent category | |
| 1 | 0.8182002 | 0.0126207 |
| 2 | 1.21658 | 0.0228322 |
| 3 | 1.518567 | 0.0335242 |
| 4 | 1.764325 | 0.0443301 |
| 5 | 1.976463 | 0.0551261 |
| 6 | 2.146921 | 0.0659209 |
| 7 | 2.263623 | 0.0766949 |
| 8 | 2.374266 | 0.0874716 |
| 9 | 2.431992 | 0.0983541 |
| 10 or more | 2.508572 | 0.1192487 |
| Interaction terms | ||
| Gender and age: 0-34 x female | 0.1451276 | 0.0377312 |
| 35-44 x female | 0.0114095 | 0.0303987 |
| 45-54 x female | 0.0155029 | 0.0239679 |
| 55-59 x female | 0.0030464 | 0.0253859 |
| 60-64 x female | -0.0209732 | 0.0240343 |
| 70-74 x female | -0.0346688 | 0.0130251 |
| 75-79 x female | -0.0609598 | 0.0138234 |
| 80-84 x female | -0.0728437 | 0.0150058 |
| 85-89 x female | -0.034932 | 0.0169001 |
| 90-94 x female | 0.0064602 | 0.0223403 |
| 95+ x female | -0.0674294 | 0.0395159 |
| Dual eligibility and institutional status: Full duals x institutional resident | -0.1198834 | 0.0491795 |
| Full duals x missing residency | -0.0315702 | 0.0433176 |
| Partial duals x institutional resident | 0.5107559 | 0.2224101 |
| Partial duals x missing residency | -0.5571722 | 0.0537358 |
| Dual eligibility, institutional status, and original reason for entitlement: | -0.1183059 | 0.0765971 |
| Non-duals x institutional resident x disabled | ||
| Non-duals x missing residency x disabled | -0.2336562 | 0.0162378 |
| Full duals x community resident x disabled | 0.1227525 | 0.0263483 |
| Full duals x institutional resident x disabled | -0.1656144 | 0.0392149 |
| Full duals x missing residency x disabled | -0.3121091 | 0.0477308 |
| Partial duals x community resident x disabled | 0.059407 | 0.0349008 |
| Partial duals x institutional resident x disabled | -0.522261 | 0.2330442 |
| Partial duals x missing residency x disabled | 0.1359108 | 0.0591859 |
| Dual eligibility, institutional status, original reason for entitlement, and gender: | ||
| Non-duals x institutional resident x aged x female | -0.0360198 | 0.0387172 |
| Non-duals x institutional resident x disabled x female | 0.0632813 | 0.0972535 |
| Non-duals x missing residency x aged x female | 0.1022933 | 0.009524 |
| Non-duals x missing residency x disabled x female | 0.2030838 | 0.0219463 |
| Full duals x community resident x aged x female | 0.0253688 | 0.0238392 |
| Full duals x community resident x disabled x female | -0.0109653 | 0.0235554 |
| Full duals x institutional resident x aged x female | -0.0780793 | 0.036145 |
| Full duals x institutional resident x disabled x female | -0.0157271 | 0.0325536 |
| Full duals x missing residency x aged x female | 0.291827 | 0.0494258 |
| Full duals x missing residency x disabled x female | 0.1634248 | 0.0433238 |
| Partial duals x community resident x aged x female | -0.0641133 | 0.0335277 |
| Partial duals x community resident x disabled x female | -0.0105862 | 0.028095 |
| Partial duals x institutional resident x aged x female | -0.37536 | 0.2447585 |
| Partial duals x institutional resident x disabled x female | -0.0201749 | 0.123955 |
| Partial duals x missing residency x aged x female | 0.4419479 | 0.0623898 |
| Partial duals x missing residency x disabled x female | 0.3076511 | 0.0604882 |
| Original reason for entitlement, CHF: | -0.1078823 | 0.0139239 |
| Aged x CHF | ||
| Original reason for entitlement, Disabled x pressure ulcers: | 0.321468 | 0.0158037 |
| Original reason for entitlement, Aged x pressure ulcers | 0.485386 | 0.0206655 |
| Original reason for entitlement, Aged x multiple sclerosis: | -0.235861 | 0.0597826 |
| Aged x multiple sclerosis | ||
| No Congestive heart failure x diabetes | -0.3146191 | 0.0121283 |
| Congestive heart failure x No diabetes | 0.1646257 | 0.0151394 |
| No Congestive heart failure x (asthma or COPD or cystic fibrosis) | -0.039098 | 0.0152652 |
| Congestive heart failure x No (asthma or COPD or cystic fibrosis) | -0.0093765 | 0.0194537 |
| No Congestive heart failure x chronic kidney disease | -0.0777502 | 0.0128155 |
| No Congestive heart failure x atrial fibrillation | 0.0852685 | 0.0142362 |
| Congestive heart failure x No atrial fibrillation | -0.1202888 | 0.0153342 |
| Schizophrenia x congestive heart failure | 0.1068341 | 0.0439697 |
| No Schizophrenia x COPD | 0.1029918 | 0.0169278 |
| Schizophrenia x No COPD | 0.1277205 | 0.0207238 |
| Schizophrenia x COPD | 0.3617188 | 0.0429217 |
| Schizophrenia x epilepsy | -0.1311777 | 0.0462925 |
| NOTE: One dollar was added to all spending values to remove zeros. Other regressions included additional chronic conditions, county-level average traditional Medicare spending, and beneficiaries’ race/ethnicity with no meaningful change in results. SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016. |
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| Table 3. Average Traditional Medicare Spending in 2015, Unadjusted for Health Risk Factors, for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, In Selected Counties | ||||||
| County (Largest city in the county) |
People who stayed in TM in 2016 | People who switched to MA in 2016 | Difference in spending (unadjusted) | Percentage difference in spending, 2015 | ||
| Number of people | Average Part A & B spending, 2015 | Number of people | Average Part A & B spending, 2015 | |||
| Allegheny, Pennsylvania (Pittsburgh) | 45,820 | $9,358 | 1,440 | $11,464 | ($2,105) | -22% |
| Baltimore City, Maryland | 51,900 | $13,413 | 1,140 | $14,831 | ($1,418) | -11% |
| Bexar, Texas (San Antonio) | 87,360 | $8,427 | 1,720 | $7,957 | $471 | 6% |
| Clark, Nevada (Las Vegas) | 104,260 | $9,323 | 3,180 | $7,294 | $2,029 | 22% |
| Cook, Illinois (Chicago) | 339,340 | $9,629 | 6,040 | $6,653 | $2,976 | 31% |
| Cuyahoga, Ohio (Cleveland) | 80,740 | $8,941 | 2,160 | $5,312 | $3,629 | 41% |
| Erie, New York (Buffalo) | 43,720 | $7,992 | 1,300 | $9,489 | ($1,498) | -19% |
| Fulton, Georgia (Atlanta) | 39,480 | $7,930 | 1,660 | $6,903 | $1,027 | 13% |
| Harris, Texas (Houston) | 157,860 | $10,134 | 5,040 | $7,725 | $2,409 | 24% |
| King, Washington (Seattle) | 113,020 | $8,044 | 2,820 | $6,029 | $2,015 | 25% |
| Los Angeles, California | 322,160 | $11,719 | 5,300 | $5,440 | $6,278 | 54% |
| Marion, Indiana (Indianapolis) | 65,580 | $9,084 | 2,720 | $9,597 | ($513) | -6% |
| Mecklenburg, North Carolina (Charlotte) | 53,760 | $7,835 | 1,560 | $11,907 | ($4,072) | -52% |
| Miami Dade, Florida (Miami) | 87,920 | $12,523 | 4,940 | $8,819 | $3,704 | 30% |
| Milwaukee, Wisconsin | 51,820 | $9,217 | 2,320 | $9,007 | $210 | 2% |
| Multnomah, Oregon (Portland) | 25,800 | $9,216 | 1,080 | $12,434 | ($3,218) | -35% |
| Queens, New York (New York City) | 102,980 | $11,460 | 3,880 | $12,328 | ($868) | -8% |
| Salt Lake, Utah | 41,720 | $8,418 | 1,220 | $6,296 | $2,122 | 25% |
| San Bernardino, California | 46,720 | $9,576 | 1,440 | $5,150 | $4,426 | 46% |
| Wayne, Michigan (Detroit) | 125,520 | $11,272 | 1,600 | $8,260 | $3,012 | 27% |
| NOTE: Excludes beneficiaries in Puerto Rico and those who enrolled in cost, Medicare Medical Savings Account (MSA), PACE plans, Medicare-Medicaid Plans (MMPs) and employer group health plans. Excludes beneficiaries with end-stage renal disease. Excludes people who died before the end of 2015. Excludes people not enrolled in Medicare prior to 2013. TM is traditional Medicare. MA is Medicare Advantage. SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016. |
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| Table 4. Average Traditional Medicare Spending in 2015 for Beneficiaries who Switched to Medicare Advantage Or Stayed in Traditional Medicare in 2016, Unadjusted for Health Risk Factors | ||||||
| Characteristics in 2015 | People who stayed in TM in 2016 | People who switched to MA in 2016 | Difference in spending | Percentage difference in spending | ||
| Number of people | Average Part A & B spending, 2015 | Number of people | Average Part A & B spending, 2015 | |||
| Overall | 23,714,780 | $8,859 | 443,240 | $7,628 | $1,231 | 14% |
| Age | ||||||
| Under 65 | 3,579,500 | $8,431 | 131,680 | $8,461 | -$30 | 0% |
| 65-69 | 3,360,240 | $6,900 | 79,480 | $6,084 | $815 | 12% |
| 70-74 | 5,598,560 | $7,341 | 96,280 | $5,915 | $1,426 | 19% |
| 75-79 | 4,341,380 | $8,792 | 63,060 | $7,469 | $1,323 | 15% |
| 80 and older | 6,835,100 | $11,327 | 72,740 | $10,347 | $980 | 9% |
| Dual eligibility | ||||||
| Full dual eligible | 3,324,880 | $12,951 | 100,360 | $12,310 | $641 | 5% |
| Partial dual eligible | 1,257,160 | $9,220 | 61,580 | $8,565 | $654 | 7% |
| Non-dual eligible | 19,132,740 | $8,122 | 281,300 | $5,788 | $2,335 | 29% |
| Gender | ||||||
| Female | 13,211,740 | $9,071 | 240,420 | $8,185 | $887 | 10% |
| Male | 10,503,040 | $8,588 | 202,820 | $7,017 | $1,572 | 18% |
| Chronic conditions | ||||||
| Anemia | 5,212,220 | $20,958 | 86,360 | $20,026 | $932 | 4% |
| Rheumatoid Arthritis | 7,987,660 | $14,133 | 136,800 | $12,960 | $1,173 | 8% |
| Asthma | 2,077,200 | $22,438 | 42,740 | $19,451 | $2,986 | 13% |
| Atrial fibrillation | 1,581,540 | $15,181 | 18,920 | $13,531 | $1,650 | 11% |
| Breast or prostate cancer | 2,160,960 | $20,359 | 24,240 | $20,502 | -$143 | -1% |
| COPD | 3,199,460 | $23,280 | 51,220 | $22,306 | $975 | 4% |
| Congestive heart failure | 2,767,340 | $21,551 | 54,960 | $18,925 | $2,626 | 12% |
| Depressive disorders | 6,273,440 | $15,846 | 139,940 | $13,779 | $2,067 | 13% |
| Diabetes | 6,592,380 | $12,749 | 136,920 | $10,973 | $1,776 | 14% |
| Epilepsy | 4,279,460 | $19,836 | 73,760 | $18,556 | $1,281 | 6% |
| Hypothyroidism | 3,865,660 | $13,668 | 57,540 | $12,931 | $737 | 5% |
| Ischemic heart disease | 6,792,700 | $15,853 | 107,780 | $15,162 | $691 | 4% |
| Kidney Disease | 594,560 | $20,993 | 13,180 | $18,447 | $2,547 | 12% |
| Liver disease | 790,800 | $21,789 | 17,040 | $19,090 | $2,699 | 12% |
| Mobility impairments | 577,820 | $32,279 | 11,120 | $29,137 | $3,142 | 10% |
| Obesity | 2,942,860 | $16,436 | 69,620 | $14,545 | $1,892 | 12% |
| Peripheral vascular disease | 2,888,480 | $19,606 | 47,420 | $18,489 | $1,118 | 6% |
| Pressure ulcers | 452,120 | $15,314 | 13,840 | $15,335 | -$21 | 0% |
| Schizophrenia | 993,360 | $31,390 | 16,060 | $31,312 | $78 | 0% |
| Stroke/TIA | 907,500 | $26,581 | 15,180 | $25,888 | $694 | 3% |
| NOTE: Values have not been adjusted for differences in health status and other risk factors. Excludes beneficiaries in Puerto Rico and those who enrolled in cost, Medicare Medical Savings Account (MSA), PACE plans, Medicare-Medicaid Plans (MMPs) and employer group health plans. Excludes beneficiaries with end-stage renal disease. Excludes people who died before the end of 2015. Excludes people not enrolled in Medicare prior to 2013. TM is traditional Medicare. MA is Medicare Advantage. Only chronic conditions with at least 10,000 people switching to Medicare Advantage are shown in table. SOURCE: Kaiser Family Foundation analysis of the Chronic Conditions Data Warehouse 5% sample of claims, 2013-2016. |
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