Health Plan Participation in the Medicare Managed Care Market
Adrion, Emily Richards
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BACKGROUND: The payment and regulatory policies facing Medicare managed care plans have changed considerably over time, but rather than being evidence-based, these policy changes have often been politically motivated. Shifts in Medicare managed care policies have seemingly been accompanied by fluctuations in plan participation. PURPOSE: The purpose of this research is to identify and understand the factors associated with plan participation in the Medicare managed care market. DATA AND METHODS: This study utilizes data from the Centers for Medicare and Medicaid Services, the HealthLeaders-InterStudy Managed Market Surveyor-Rx data files, the Area Health Resources File, the Census, and the Current Population Survey. Cross-sectional analyses examine plan participation in 2008, 2011, and 2012. First difference analyses examine changes in plan participation from 2008-2011 and 2011-2012. KEY RESULTS: A change in the relative benchmark rate (the ratio of the county-level Medicare Advantage benchmark rate to average costs under traditional fee-for-service Medicare) between 2008 and 2011 of two standard deviations below the mean change – a 10.1 percentage point decrease in the relative benchmark rate – was associated with a 2 percentage point lower predicted probability of a plan entering relative to never entering a county between 2008 and 2011 (predicted probability [PP] 0.67, 95% CI 0.67-0.67, p<.001), as compared to the predicted probability of plan entry at the mean change in the relative benchmark rate (PP 0.69, 95% CI 0.69-0.69, p<.001), and was associated with a 5 percentage point increase in the predicted probability of a plan exiting relative to staying in a county between 2008 and 2011 (PP 0.90, 95% CI 0.87-0.90, p<.001), as compared to the predicted probability of plan exit at the mean change in the relative benchmark rate (PP 0.85, 95% CI 0.85-0.88, p<.001). Plan profit status, local rates of employer-sponsored retiree coverage and Medicaid supplemental insurance coverage, hospital market concentration, and a parent company’s participation in the local non-Medicare managed care market were also found to be statistically significantly associated with plan participation. CONCLUSION: County-level Medicare Advantage benchmark rates are, in fact, associated with plan participation, but the magnitude of the association may be lower than is commonly thought.