The Perks of Medicare Advantage Versus Traditional Medicare


A cohort study explores the association of Medicare Advantage enrollment with post-acute care use, along with patient outcomes among retired state employees.

Image Credit: Adobe Stock Images/

Image Credit: Adobe Stock Images/

Medicare Advantage (MA) plans are often known for creating financial incentives, as the US Centers for Medicare & Medicaid Services (CMS) pays MA plans a monthly, upfront rate that is expected to cover most of the healthcare expenses for plan enrollees, while the remaining amount is kept by the plans as profit.

Popularity surrounding MA has risen exponentially, as the Medicare beneficiaries enrolled in MA instead of traditional fee-for-service Medicare (TM) continues to grow, increasing from 19% in 2007 to 51% in 2023, according to a cohort study published in JAMA Health Forum.1

One aspect of coverage revolves around post-acute care (PAC). Basically, following a hospital stay, patients can elect to receive skilled nursing care and rehabilitation services in a skilled nursing facility (SNF), an inpatient rehabilitation facility (IRF), or in their home from a home health agency (HH).

The case can be made that PAC can result in better long-term functioning, however, the study authors noted that a counterargument to that is the higher short-term costs, which could potentially impact the quality of care by MA plans versus that of TM. There was also a 2022 report from the US Department of Health and Human Services Office of the Inspector General that indicated MA plans had denied requests for IRF care that were deemed to meet criteria for medical necessity.

Using Medicare data on 4,613 hospitalizations among retired Ohio state employees, along with two comparison groups in 2015 and 2016, the study authors sought to examine the connection between policy change and the use of post-acute care and outcomes. This was done by predicting intent-to-treat effects of this aforementioned policy change with the help of a difference-in-differences approach. This compares changes in outcomes for Ohio public retirees following the change in health benefits with comparison groups that were unimpacted by the change.

The investigators decided to home in on three conditions that would call for intensive PAC following hospitalization:

  • Hip and femur procedures following a fracture
  • Lower extremity joint replacement following a fracture
  • Stroke

In order to help predict changes in PAC use and post-discharge results after hospitalizations before and after the benefits policy change alongside each of the two comparison groups, difference-in-differences regressions were used.

The breakdown of the total study sample size featured 2,373 hospitalizations for Ohio public retirees, 1,651 hospitalizations for other Humana MA enrollees in Ohio (in January 2015, all Medicare-eligible Ohio public retirees who elected to receive health benefits were registered for a mandatory group MA plan that was managed by this particular company), and 589 hospitalizations for public retirees in Kentucky. After the 2016 policy implementation, the percentage of hospitalizations that was covered by MA decreased by 70.1 (95% CI, −74.2 to −65.9) percentage points (pp), inpatient rehabilitation facility admissions increased by 9.7 (95% CI, 4.7 to 14.7) pp, use of only home health or skilled nursing facility care fell by 8.6 (95% CI, −14.6 to −2.6) pp, and days in the community fell by 1.6 (95% CI, −2.9 to −0.3) days for Ohio public retirees compared with other Humana MA enrollees in Ohio. When Kentucky public retirees were used as a control group, the amount of 30-day mortality or hospital readmissions remained the same.

The study authors concluded that “this cohort study found that after a change in retiree health benefit policy, most Ohio public retirees shifted from MA to TM and received more intensive PAC with no significant change in the measured short-term post-discharge outcomes. Future work should consider measures of post-acute functional status over a longer follow-up period.”


1. Huckfeldt PJ, Shier V, Escarce JJ, et al. Postacute Care for Medicare Advantage Enrollees Who Switched to Traditional Medicare Compared With Those Who Remained in Medicare Advantage. JAMA Health Forum. 2024;5(2):e235325. doi:10.1001/jamahealthforum.2023.5325

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