Find Out What Medicare Option is Best for You.

There is an ongoing debate on whether Medicare Part C and Medicare Advantage plans offer better quality of health over traditional Medicare or Medicare Parts A and B. Two theories can be formulated from these debates. The first suggests that providers of Medicare Advantage may be short-changing consumers in order to realize higher profits. The second suggests that insurance companies offering Medicare Advantage have enough incentives to provide improved quality of care for consumers because these plans are more closely monitored than traditional Medicare.

The March 2012 report released by the Medicare Payment Advisory Commission, or Medpac, dedicated an entire chapter on Medicare Advantage. It however only made a superficial comparison between traditional Medicare and Medicare Advantage. There also isn’t any formal study that compares these two types of insurance coverage.

Medicare Advantage covers multiple varieties of health insurance plans. It includes coordinated group care plans, such as health maintenance organizations (HMOs), preferred provider organizations (PPOs) both local and regional. It also includes special needs insurance plans designed for patients who have special needs. Also, it includes fee-for-service plans offered by private insurers where consumers get to choose their insurance provider, as well as unmanaged care similar to the traditional Medicare fee-for-service plans.

The Medpac report reveals that the quality of these plans differ between each type, and also varies within plan types. Consumers seem to lean towards PPOs then HMOs when it comes to the quality of medical care and tend to avoid private fee-for-service plans. There are more studies on Medicare Advantage plans over traditional Medicare plans.

Both Medicare Advantage and traditional Medicare are studied annually with the use of a survey conducted on patients. This survey is referred to as “Consumer Assessment of Health Care Providers and Systems” or “CAHPS”. Results of this survey actually revealed that there isn’t that much difference between traditional Medicare and Medicare Advantage plans. Other than CAHPS, there are two other surveys that monitor Medicare Advantage Plans only.

One of these surveys is the HEDIS or the “Health Effectiveness Data and Information Set”. This survey is based on data collated from surveys answered by beneficiaries coming from their clinical records, and from administrative and claims information. The results released by the HEDIS survey are taken very seriously by private insurance providers, as well as the public health sector.

The other survey is the Medicare “Health Outcomes Survey” or HOS. This survey gathers self-reported data on the health status of beneficiaries enrolled in Medicare Advantage plans. The “Patient Protection and Affordable Care Act”, also known as the health reform law, has created a star ratings system for Medicare Advantage plans. The rating is a one to five point-rating based on over 53 metrics coming from the CAHPS, HOS, and HEDIS systems. The system gives “5 stars” for excellent performance and “1star” for poor performance. This star system for Medicare sets very high standards for insurance plans. For instance in 2012, only 11 health plans out of 500 received the highest rating.

There are studies, particularly the ones commissioned by the American Health Insurance Plans (AHIP), that indicate that the rates of hospital readmission of patients on Medicare Advantage are much lower compared to those of traditional Medicare. While it is true that not all hospital re-admissions are caused by poor medical care following an admission, the low rates of readmission is believed to be an indicator of superior health care quality.

Another report found that hospital admissions related to diabetes were lower under the Medicare Advantage plan than in traditional Medicare coverage. Patients under Medicare Advantage had fewer hospital admissions for preventable diseases over traditional Medicare. Another study suggested that Medicare Advantage plans scored better on clinical quality of care over traditional Medicare. One other study arrived at the conclusion that HMO enrollments under Medicare Advantage use less medical services and experience more satisfaction in their use of these services than those enrolled in traditional Medicare.

There still is not enough literature on the benefits of Medicare Advantage over traditional Medicare. There is even less research on the theory that private insurance companies offering Medicare Advantage plans are short-changing beneficiaries by offering poor quality of health in order to realize bigger profits. It may be more realistic to believe that health insurance companies are more inclined to provide high quality Medicare Advantage plans if only for the reason that they are more closely monitored by the government.