Medicare Advantage: Payment Cuts Reportedly Didn’t Affect Member Access to Care


Starting in 2009, Medicare Advantage saw its plan payments reduced by the Affordable Care Act. Maybe you’re wondering “what is Medicare Advantage?” In short, Medicare Advantage is a type of Medicare insurance that is serviced through a private health insurer. When the payments were reduced by law with Obamacare, predictions at the time held that members would have poorer access to care and more expensive plans.

The Reality of Medicare Advantage Cuts

However, counter to this assumption, new studies have shown quite the opposite to be true.  “The ACA’s reductions to MA plan payments were not associated with declines in healthcare access or affordability for MA enrollees,” the study reads.

“In fact, as payment cuts were phased in, MA plans reduced costs without diminishing healthcare access or affordability for enrollees relative to TM [Traditional Medicare] beneficiaries. Despite contrary projections, MA plans experienced steady, robust enrollment growth from 2009 to 2017, implying that MA plans became more attractive to beneficiaries during a period of increasing payment pressure.”

Why Were Payments Decreased?

When the ACA was passed, Medicare Advantage was determined to be too expensive in relation to other Medicare plans. Many felt as though the plans under Medicare Advantage were receiving payments in excess of 114 percent of the payments of normal Medicare plans.

As for 2020, the question of whether Medicare Advantage payments are still overly high is in the air.

Notably, the changes to Medicare Advantage did have the desired effect on the payments. From 2009 to 2011, the plans reduced from 102 percent of normal spending to 90 percent, bringing them well under the average. This study, however, showed that the reduction in payments for the Medicare Advantage plans had no noticeable effect on care or experience for members.

Study Findings

The study also found that Medicare Advantage recipients were more likely to have a general physician and to have visited them in the past 12 months than a Traditional Medicare recipient.

“However, changes in delay in care for cost reasons were not statistically significant in either MA or TM, and there was no statistically significant difference between the MA change and the TM change over the study period,” the study’s researchers elaborated.

“There were no statistically significant differences between MA changes over time and TM changes over time in any affordability measures.”