MEDICARE ADVANTAGE: Relationship between Benefit Package Designs and Plans’ Average Beneficiary Health Status

Source: GAO

GAO examined (1) MA plan benefit packages by average health status of plans’ enrolled beneficiaries, (2) distribution and characteristics of MA plans by average beneficiary health status, and (3) CMS’s process for ensuring that benefit packages do not discriminate with respect to health status.

In 2008, plans in the good health group generally had lower premiums, higher cost sharing for certain services, and fewer additional benefits than plans in the poor health group. Almost half of the plans in the good health group did not have an MA premium for medical or drug coverage, while about one-fifth of plans in the poor health group had no MA premium. Plans in the good health group had higher cost sharing, weighted by enrollment, for inpatient hospital care, skilled nursing facility stays, and renal dialysis than plans in the poor health group. Plans in the good health group were more likely to have an out-of-pocket (OOP) maximum, but the average OOP maximum for plans in that group, weighted by enrollment, was 55 percent higher than that for plans in the poor health group. Comprehensive dental and hearing aid benefits were more likely to be included in the benefit packages for beneficiaries in the poor health group of plans whereas fitness benefits were more likely to be included in the benefit packages for beneficiaries in the good health group of plans.

Medicare Advantage: Relationship between Benefit Package Designs and Plans' Average Beneficiary Health Status. GAO-10-403, April 30.  Highlights