Do Family Caregivers Subsidize Medicare Advantage Plans?

• In Event: Growing Older, Growing Needs: Economic Insecurity, Caregiving, and Food Insecurity in Later Life

Abstract

The end-of-life represents an expensive period of service use for Medicare beneficiaries with life-limiting conditions.  Historically, these treatments have been poorly coordinated, with expensive transitions across sites of care.  Nearly half of Medicare beneficiaries are now enrolled in Medicare Advantage (MA), the managed care alternative to Traditional, fee-for-service Medicare (TM), near the end-of-life. MA plans are incentivized to reduce healthcare spending, which could be done by encouraging enrollment in hospice care, improving care coordination, or skimping on necessary but expensive services.  Underprovision of care for the sickest patients near the end-of-life could shift spending from MA plans to patients’ out-of-pocket spending or reliance on assistance from family caregivers.  Since caregiving can harm the health and earnings of caregivers, it is particularly important to understand this potential shift when evaluating the returns to public spending on Medicare.

We study a cohort of patients that experiences 1 or more emergency hospitalizations for a life-limiting condition (end-stage organ failure, cancer, dementia) in the last year of life, a group that would be potentially appropriate for hospice care and has significant health needs.  We focus on extremely sick patients in part to reduce concerns that differences in unmeasured health status might explain observed differences between MA and TM.  Using Medicare claims and MA encounter data, we first show that these patients are 6 percentage points less likely to be sent to skilled nursing following an emergency hospitalization with MA.  This difference is not made up with lower cost home or hospice care- patients discharged home are an additional 3 percentage points less likely to receive any care at home in the 3 and 7 days post-discharge. 

Since it is clinically implausible that these patients are able to return home without assistance, we next analyze Health and Retirement Study data on deaths from to 2016 - 2021 determine whether these patients are disproportionately relying on family care or purchasing additional services out-of-pocket.  While we will be unable to determine whether differences in caregiving reflects different preferences among those choosing MA versus TM or differences because MA families have no other options, it is crucial that the value of this care be accounted for when comparing the efficiency of MA versus TM.  

 

 

Author

• Lauren Hersch Nicholas, University of Colorado Denver
  Presenting Author