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Forum for Health Economics & Policy

Editor-in-Chief: Goldman, Dana / Romley, John

CiteScore 2018: 0.89

SCImago Journal Rank (SJR) 2018: 0.314
Source Normalized Impact per Paper (SNIP) 2018: 0.548

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Could Improving Choice and Competition in Medicare Advantage be the Future of Medicare?

Alice M. Rivlin / Willem Daniel
Published Online: 2015-11-20 | DOI: https://doi.org/10.1515/fhep-2015-0046


About 30 percent of Medicare beneficiaries enroll in private Medicare Advantage (MA) plans but do so at a relatively high-cost. This paper explores the advantages and challenges of introducing competitive bidding among MA plans (Plan One) or among MA plans and Fee-for-Service (Plan Two or Premium Support). We conclude that competitive bidding could reduce the cost of Medicare, especially in densely populated urban areas. However, there would be serious challenges in rural areas and risk adjustment methodology would have to be substantially improved. In Plan Two, sicker beneficiaries might move to Fee-for-Service and beneficiaries might have to pay more to stay with a preferred provider or broader network. If these problems are addressed, we believe that premium support can be a meaningful improvement to the MA program.

Keywords: Medicare Advantage; premium support

About the article

Corresponding author: Alice M. Rivlin, Brookings Institution, Economic Studies, 1775 Massachusetts Ave, Washington DC, USA, e-mail: arivlin@brookings.edu

Published Online: 2015-11-20

Published in Print: 2015-12-01

Citation Information: Forum for Health Economics and Policy, Volume 18, Issue 2, Pages 151–168, ISSN (Online) 1558-9544, ISSN (Print) 2194-6191, DOI: https://doi.org/10.1515/fhep-2015-0046.

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