The ACA’s cuts to MA payments were expected to reduce the attractiveness of MA to both plans and beneficiaries, primarily through reductions in rebates, thereby decreasing enrollment in the MA plan program.7-9 Instead, MA enrollment steadily increased as the ACA was implemented. Prior research indicates that MA plans significantly reduced costs (as reflected by their bids) in response to ACA payment pressure, lowering their bids from 102% of TM to 90% of TM.4,5 This preserved room for rebates,6 which may partially explain the program’s continued attractiveness. However, such bid reductions could have been achieved through significant narrowing of networks, increased utilization management, or increases in cost sharing, which could harm beneficiary access to and affordability of care even as rebates remained stable.
Our findings show that the ACA’s payment reductions and plans’ resulting reductions in costs were not associated with declines in access to or affordability of care in MA relative to TM. Between 2009 and 2017, as the ACA’s changes to MA payments were fully phased in, we found no statistically significant changes in healthcare access and affordability among MA beneficiaries after adjusting for demographic, socioeconomic, region, and health status characteristics. More importantly, we found no statistically significant differences between changes in access and affordability in MA compared with TM over this period. These results suggest that MA plans could reduce costs under the ACA without negatively affecting the average beneficiary’s healthcare access and affordability.
Bid reductions were only one way that plans maintained revenue and rebates, however, and other revenue sources available to plans depend partially on maintaining a high level of beneficiary access to care. For example, MA plans also preserved revenue and rebates by increasing quality scores,10 which increase both benchmarks and rebate percentages. Quality scores take into account beneficiary experiences accessing care, as well as beneficiaries’ receipt of preventive services, creating an incentive for plans to maintain high beneficiary access to care. In addition, MA may have preserved revenue through the risk adjustment system by more comprehensive coding of enrollees’ diagnoses,11 either through health assessments or when seen by their physicians. Overall, continued MA enrollment growth may reflect that premiums, extra benefits,1,10 and access and affordability have remained relatively stable despite overall payment reductions, making those payment changes largely invisible to beneficiaries.
Our analysis has several limitations. First, our regression adjustments cannot fully control for changes in the MA and TM beneficiary populations over the study period or for changes in local healthcare markets that could affect access and affordability. Second, MA payment cuts were not uniform across the country, but we are unable to isolate those geographic areas or plans most exposed to payment cuts using the NHIS. We are also unable to observe MA and TM beneficiaries’ county of residence, so we cannot verify whether MA and TM respondents are exposed to similar healthcare markets. Third, we focus on the average beneficiary, but it is possible that beneficiaries with more significant healthcare needs have fared differently in MA compared with TM over this period. Fourth, the NHIS captures health insurance coverage at the time of the survey, so we are unable to isolate beneficiaries who changed coverage during the year. These beneficiaries may be particularly likely to experience access and affordability disruptions. Finally, we used survey results from after the ACA was passed to measure pre–payment cut levels of access and affordability in our second model, although MA plans may have already started to implement changes to prepare for the payment reductions.
The ACA’s reductions to MA plan payments were not associated with declines in healthcare access or affordability for MA enrollees. In fact, as payment cuts were phased in, MA plans reduced costs without diminishing healthcare access or affordability for enrollees relative to TM beneficiaries. Despite contrary projections, MA plans experienced steady, robust enrollment growth from 2009 to 2017, implying that MA plans became more attractive to beneficiaries during a period of increasing payment pressure.