Poster #30 - Does Reimbursement Matter? Evaluating Medicare Advantage Plan Availability and Penetration

• In Event: Friday Poster Reception

Abstract

For many seniors, Medicare Advantage (MA) plans offer more financial and healthcare benefits. A key aspect determining the affordability and availability of these plans is the government subsidies via supply-side reimbursements. Under the current mechanism, the Centers for Medicare and Medicaid Services (CMS) rank counties based on their traditional fee-for-service (FFS) spending, divide them into quartiles, and set annual cap payments, known as benchmarks, based on the quartile. Using data from CMS and a regression discontinuity design, I leverage the discontinuous jumps in these benchmarks and compare changes in the market structure and penetration for counties surrounding the quartile cutoffs. Overall, I find insignificant estimates for the number of operating firms, the number of plans available, or penetration. These findings are suggestive that firms and MA plans are insensitive to these payment differences along the margins. These results have important policy implications in the wake of debates on overpayments. Lastly, I analyze different reimbursement designs using the Marginal Value of Public Funds (MVPF) framework. MVPF serves a dual role: First, it measures the welfare impact of the current payment system per dollar increase in public costs. Second, it provides a valuable metric for understanding the inherent value of each payment arrangement, which is fundamental for comparative analysis. When deciding whether and how to adjust Medicare payments to private plans, policymakers should reconsider the program's goals and take measures to achieve efficiencies while preserving access and quality of care for beneficiaries.

Author

• Salpy Kanimian, Rice University
  Presenting Author