Do Medicare Advantage Rebates Reduce Enrollees' Out-of-Pocket Spending?

TitleDo Medicare Advantage Rebates Reduce Enrollees' Out-of-Pocket Spending?
Publication TypeJournal Article
Year of Publication2018
AuthorsNicholas, LHersch, Wu, S
JournalMedical Care Research & Review
ISSN Number1552-6801
KeywordsMedicare linkage, Medicare/Medicaid/Health Insurance

The majority of Medicare Advantage (MA) plans receive payments that exceed their costs of providing basic Medicare benefits. There is controversy about whether these payments are passed on to the enrollees as supplemental benefits or are retained by plans. We used survey data on MA beneficiaries' actual out-of-pocket (OOP) spending linked to MA payment information to test whether higher plan payments and rebates lowered enrollee OOP spending. We used instrumental variables regression models to address concerns that plan payments and rebates may reflect anticipation of enrollees with particular health-spending profiles. We found that beneficiaries recovered only $0.65 of every $1.00 in payments exceeding fee-for-service spending through lower OOP spending but more than fully recovered the value of the rebates supporting supplemental benefits.

User Guide Notes

Alternate JournalMed Care Res Rev
Citation Key9963
PubMed ID30382801
PubMed Central IDPMC6494723
Grant ListK01 AG041763 / AG / NIA NIH HHS / United States
T32 HS000029 / HS / AHRQ HHS / United States